Udyog Tax News Flash

February 2014

Customs: Exemptions in the interim budget

The central government has issued notification 5/2014-Customs dated 17 February 2014 as part of the interim budget exercise, in which the following exemptions are provided: Human embryo has been exempted from basic customs duty if imported for non-commercial purposes. Pears and quinces have been exempted from customs duties in excess of 30%. The basic customs duty on certain kinds of fatty acids of edible grade has been reduced to 2.5%, and of non-edible grade to 7.5%. LNG / NG imported for use in the C2 C3 plant of ONGC in the Dahej SEZ have been exempted from customs duty. For goods imported under exemption 12/2012-Customs for setting up or expansion of a mega power project, and if the mega power status certification by the Joint Secretary was provisional, the time limit for providing final certificate has been extended from thirty six months to sixty months, by amendment of condition 93 of the notification. Tunnel excavation and lining equipment have been exempted by a generic entry in serial number 21 of list 16 to notification 12/2012Customs, in place of specific items named for exemption in serial numbers 1, 2, 6, 16, and 20 of the said list, which now stand deleted. Specified goods required for construction of roads have been exempted from basic customs duty if exempted by the Ministry of Surface Transport or an authorized person. Palm stearin has been completely exempted from basic customs duty. The basic customs duty on stearin other than palm stearin, and on industrial fatty alcohols, has been reduced to 7.5%. The concessional rate of duty on pulses has been extended till the end of September 2015. The basic customs duty on machinery for printing bank notes has been reduced to 5%. See notification 5/2014-Customs dated 17 February 2014, at http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/cstarr2014/cs05-2014.htm As part of the interim budget exercise, the central government has also amended notification 21/2012-Customs to exempt special additional duty of customs [which is imposed under section 3(5) of the Customs Tariff Act 1975 to offset VAT or sales tax] on the following goods to be imported by or on behalf of Bank Note Paper Mill India Private Limited (BNPMIPL) namely: (i) Plant or machinery or equipment, related spares and consumables imported by or on behalf of BNPMIPL, for setting up of a Bank Note Paper

Mill project to manufacture Cylinder Mould Vat Made Watermarked Banknote (CWBN) paper and other security paper at Mysore, Karnataka; and (ii) Plant or machinery or equipment, related spares and consumables for online inspection of pulp. The exemption will be valid uptil 15 January 2014. The amending notification 6/2014-Customs dated 17 February 2014 under which the exemption has been brought can be seen at http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/cstarr2014/cs06-2014.htm

Customs: AC/DC given powers to allow amendment of bill of entry/shipping bill

Under section 149 of the Customs Act 1962, the importer or exporter, as the case may be, can ask for amendment in the bill of entry/shipping bill before the goods have been cleared from the port of import or exported, as the case may be. The power to permit such amendment was vested in the Additional/Joint Commissioner of Customs under notification 40/2012Customs (NT). The central government has now issued notification 12/2014-Customs (NT) dated 17 February 2014 to empower officers of the level of Deputy Commissioner/Assistant Commissioner to permit amendment of the said documents before order for clearance of the goods has been made. If the request for amendment is received after order permitting clearance of the goods has been made, the power to permit amendment remains with the Additional Commissioner/Joint Commissioner. The notification 12/2014-Customs (NT) dated 17 February 2014 can be downloaded from http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/csnt2014/csnt12-2014.htm

Customs: rates of exchange notified

The CBEC has issued notification 13/2014-Customs (NT) dated 20 February 2014 under section 14(2) of the Customs Act 1962 to notify rates of exchange of specified currencies for purposes of arriving at customs assessable value. The rates are effective from 21 February 2014. Under this notification, the US dollar will exchange for INR 62.95, and the pound sterling will exchange for INR 105.30 for arriving at the value of imported goods; the US dollar will exchange for INR 61.95 and the pound sterling for INR 103 for arriving at the value of export goods. The notification 13/2014Customs (NT) dated 20 February 2014 can be seen at http://cbec.gov.in/customs/cs-act/notifications/notfns-2014/csnt2014/csnt13-2014.htm

Service tax: exemptions in the interim budget

The central government has issued notification 4/2014-ST dated 17 February 2014 to provide for the following exemptions from service tax, by amendment of notification 25/2012-ST: A new serial number 2A has been inserted into notification 25/2012-ST. By this, services provided by blood cord banks in relation to preservation of stem cells have been exempted from service tax. Serial number 40 has been inserted into notification 25/2012-ST, by which services in relation to loading, unloading, storage and transportation of rice have been exempted from service tax. Notification 4/2014-ST dated 17 February 2014 can be downloaded from http://www.servicetax.gov.in/notifications/notfns-2014/st04-2014.htm

Central excise: interim budget

exemptions

in

the

Battery packs, battery chargers, AC/DC motor and AC/DC controller for electric vehicles and hybrid vehicles, and certain other specified items for hybrid vehicles are subject to a concessional rate of basic customs duty of 6%, which is valid for a limited period. The period of validity of the said exemption has now been extended up to 31 March 2015, by amendment to the proviso in the first paragraph of notification 12/2012-CE. The excise duty on specified machinery, vehicles and vehicle chassis has been reduced by adding serial numbers 345 to 367 to the table of concessional rates in notification 12/2012-CE. The price ceiling of Rs 2000 for concessional rate of excise duty on mobile phone handsets has been removed. Now the concessional rate of duty of 6% is applicable to all mobile phone handsets if Cenvat credit on inputs or capital goods is taken, and the rate of 1% is applicable if Cenvat credit is not taken. Motor vehicles in the SUV category have been included in the concessional rates of excise duty notified.

These changes have been brought by notification 4/2014-CE dated 17 March 2014, which amends notification 12/2012-CE. The said amending notification can be seen at http://cbec.gov.in/excise/cx-act/notfns-2014/cx-tarr2014/ce04-2014.htm

Bank account is not goods: Delhi HC

Customs and excise officials are known to seize and confiscate bank accounts under the provisions for seizure and confiscation of goods. In one such case the Delhi High Court observed that a bank account is not currency, nor is it a document, and therefore cannot be seized under the provisions for goods, nor does it attract the provisions for lifting of seizure in case of non-issue of show cause notice within six months. This judgment in the case of WP(C) filed by Ravi Crop Science can be seen at http://lobis.nic.in/dhc/GPM/judgement/21-122013/GPM20122013CW74492012.pdf

Udyog has been successful in integrating iTAX with following the ERPs

SAP E.C.C. 6.0 MFG-QAD eB 2.1 BPCS BAAN FP 7

SAGE Accpac ERP 100 v 5.6 ABAS Adage Oracle

Updated and written by Radha Arun [radha.arjuni@gmail.com], Consultant to Udyog Software (India) Ltd.
Udyog Software (India) Ltd. www.udyogsoftware.com Phone: 022-67993535 Email: ca-service@udyogsoftware.com | sales@udyogsoftware.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is

received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.