A. Customs
Reduction in duty on certain inputs to address the problem of’ duty inversion: Metal parts for use in the manufacture of electrical insulators; ethylene-propylene-non-conjugated-Diene Rubber (EPDM), water blocking tape and Mica glass tape for use in the manufacture of insulated wires and cables; magnetron upto 1 KW for use in the manufacture of microwave ovens; C- Block for compressor, over load protector & positive thermal co-efficient and Crank Shaft for compressor, for use in the manufacture of Refrigerator compressors; zeolite, ceria zirconia compounds and cerium compounds for use in the manufacture of washcoats, which are further used in manufacture of catalytic converters; anthraquinone for manufacture of hydrogen peroxide; Sulphuric acid for use in the manufacture of fertilizers.
Reduction in Basic Customs Duty to reduce the cost of raw materials: ethylene dichloride, vinyl chloride monomer and styrene monomer from 2.5 per cent to 2 per cent; isoprene and liquefied butanes from 5 per cent to
2.5 per cent; butyl acrylate from 7.5 per cent to 5 per cent; ulexite ore from 2.5 per cent to Nil; antimony metal, antimony waste and scrap from 5 per cent to 2.5 per cent; specified components for use in the manufacture of specified CNC lathe machines and machining centers from 7.5 per cent to 2.5 per cent; certain specified inputs for use in the manufacture of flexible medical video endoscopes from 5 per cent to 2.5 per cent; HDPE for use in the manufacture of telecommunication grade optical fibre cables from 7.5 per cent to Nil per cent; black light unit module for use in the manufacture of LCD/LED TV panels from 10 per cent to Nil; organic LED TV panels from 10 per cent to Nil; CVD and SAD are being fully exempted on specified raw materials for use in the manufacture of pacemakers; evacuated tubes with three layers of solar selective coating for use in the manufacture of solar water heater and system to Nil; active energy controller for use in the manufacture of Renewable Power
System Inverters to 5 per cent, subject to certification by MNRE; parts, components and accessories for use in the manufacture of tablet computers and their sub-parts for use in manufacture of parts, components and accessories were fully exempted from BCD, CVD and SAD.
Reduction in SAD to address the problem of CENVAT credit accumulation: all goods [except populated PCBs], falling under any chapter of the Customs Tariff, for use in manufacture of IT A bound goods from 4 per cent to Nil; naphtha, ethylene dichloride, vinyl chloride monomer and styrene monomer for manufacture of excisable goods from 4 per cent to 2 per cent; metal scrap of iron & steel, copper, brass and aiuminiurn from 4 per cent to 2 per cent; inputs for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures and LED lamps from 4 per cent to Nil.
Increase in Basic Customs Duty: metallurgical coke from 2.5 per cent to 5 per cent; tariff rate on commercial vehicles from 10 per cent to 40 per cent and effective rate from 10 per cent to 20 per cent. However, customs duty on commercial vehicles in completely knocked down kits and electrically operated vehicles including those in CKD condition will continue to be at 10 per cent.
B. Excise
Excise duty structure on certain goods was restructured as follows: mobiles handsets, including cellular phones from 1 per cent without CENVAT credit or 6 per cent with CENVAT credit to 1 per cent without CENV AT credit or 12.5 per cent with CENVAT credit; tablet computers from 12 per cent to 2 per cent without CENVAT credit or 12.5 with CENVAT credit; specified raw materials for use in the manufacture of pacemakers to Nil; wafers for use in the manufacture of integrated circuit (1 C) modules for smart cards from 12 per cent to 6 per cent; inputs for use in the manufacture of LED drivers and MCPCB for LED lights, fixtures and LED lamps from
12 per cent to 6 per cent; duty on Pig iron SO grade and Ferro-silicon-magnesium for use in the manufacture of cast components of wind operated electricity generators reduced to Nil, subject to certification by MNRE; solar water heater and system from 12 per cent to Nil without CENVAT credit or 12.5 per cent with CENVAT credit; round copper wire and tin alloys for use in the manufacture of Solar PV ribbon for manufacture of solar PV cells to Nil subject to certification by Department of Electronics and Information Technology.
Reduction in number of levies: Education cess and secondary & higher education cess on excisable goods were subsumed in Basic Excise duty.
Improving the quality of life and public health through Swachh Bharat initiatives: Increase in the clean energy cess levied on coal, lignite and peat from Rs. 100 per tonne to Rs.200 per tonne; extension upto 31.03.2016 of the concessional customs and excise duty rates on specified parts of electrically operated vehicles and hybrid vehicles; increase in excise duty on sacks and bags of polymers of ethylene other than for industrial use from 12 per cent to 15 per cent.
C. Measures post-Budget 2015-16 (Excise and Customs)
Basic customs duty on specified steel goods was increased to 10 / 12.5 per cent.
Anti-dumping duty and safeguard duty was imposed on specified goods.
Basic customs duty and excise duty was exempted on specified bunker fuels for use in Indian Flag vessels for carrying export-import containers, empty containers and domestic containerized cargo.
Excise duty was exempted on RBD Palm Stearin, Methanol and Sodium Methoxide for use in the manufacture of specified biodiesel for a period upto 3l.03 .20 16.
Basic customs duty was increased on sugar from 15 per cent to 25 per cent which was later increased to 40 per cent.
Excise duty was exempted on ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 i.e. 1st October, 2015 onwards, for supply to the specified public sector oil marketing companies, for the purposes of blending with petrol. Also, input tax credit was allowed to manufacturers of such exempted ethanol.
Basic customs duty was increased on crude edible oils (of vegetable origin) from 7.5 per cent to 12.5 per cent and refined edible oils (of vegetable origin) from 15 per cent to 20 per cent.
Basic customs duty was increased on ghee, butter and butter oil from 30 per cent to 40 per cent for a period up to and inclusive of the 31 st day of March, 2016.
Basic customs duty of 10 was imposed on wheat which was later increased to 25 per cent for a period up to 31.03.2016.
CVD and SAD exemptions available to specified defence supplies were withdrawn. Exemption from excise duty available to defence PSUs and ordnance factories was withdrawn.
D. Service tax
Education cess and secondary & higher education cess on taxable services were subsumed in Service tax with effect from 01.06.2015.
Registration in service tax to be granted within two working days.
Time limit for taking CENVAT credit of duty/tax paid on inputs and input services was extended from six months to one year.
For availing CENVAT credit of service tax paid under reverse charge mechanism, the condition of having made the payment of consideration to the service provider was done away with.
Penalty provisions in service tax were rationalized to encourage compliance and early dispute resolution.
Service tax assesses were allowed to issue digitally signed invoices and maintain other records electronically.
Instructions were issued providing for withdrawal of prosecution where a notice was exonerated in quasi-judicial proceedings and such order has attained finality.
If the export proceeds are not received within the prescribed time period, the exporter would have to reverse the Cenvat Credit. Re-credit of such reversed Cenvat credit was allowed, if such export proceeds are received within one year from the specified period.
Uniform abatement of 70 per cent from gross value prescribed for transport by rail, road and vessel.
Restrictions were placed on exemption on specified services of construction, repair, maintenance, renovation or alteration service provided to the Government, a local authority, or a governmental authority.
Exemption to construction, erection, commissioning or installation of original works pertaining to an airport or port is being withdrawn.
Exemption to services provided by a performing artist in folk or classical art form of music, or dance, or theatre, would be limited only to such cases where amount charged is upto Rs 1,00,000 for a performance.
Exemption to transportation of food stuff by rail, or vessels or road would be limited to food grains including rice and pulses, flour, milk and salt. Transportation of agricultural produce is separately exempt.
Exemptions are being withdrawn on services provided by a mutual fund agent to a mutual fund or assets management company, distributor to a mutual fund or AMC, selling or marketing agent of lottery ticket to a distributor.
Services by common affluent treatment plants were exempted.
Certain pre-cold storage services relating to fruits and vegetables were exempted.
Service provided by way of admission to museum, zoo, national park, wild life sanctuary and a tiger reserve was exempted.
The negative list entry that covers “admission to entertainment event or access to amusement facility” was omitted.
Service tax would be levied on services by way of admission to entertainment event of concerts, pageants, musical performances concerts, award functions and sporting events other than the recognized sporting event, if the amount charged is more than Rs. 500 for right to admission to such an event.
The entry in the negative list was pruned to exclude services related to carrying out production or manufacture of alcoholic liquor for human consumption.
E. Service Tax: post-Budget 2015-16
Service tax on Pradhan Mantri Suraksha Bima Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojana; Pradhan Mantri Jan Dhan Yogana; and on services by way of collection of contribution under Atal Pension Yojana were exempted.
Specified services under Power System Development Fund Scheme were exempted.
In the case of good transport service, a single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of business.
The service tax payable under section 66B of the Finance Act, 1994, on the service provided by an Indian bank or other entity acting as an agent to the MTSO in relation to remittance of foreign currency from outside India to India, in from the 1st day of July, 2012 and ending with the 13th day of October, 2014, but for the said practice, shall not be required to be paid.
Charitable activities on advancement of yoga provided by an entity registered under Section 12 AA of the Income Tax Act were exempted.
Specified services provided by Business Facilitators/Business Correspondents with respect to a Basic Saving Bank Deposit were exempted.
Detailed guidelines were issued for speedy disbursal of pending refund claims of exporters of services under rule 5 of the CENVAT Credit Rules, 2004.
Swachh Bharat Cess was imposed at the rate of 0.5 per cent on all services, which are presently liable to service tax with effect from 15th November 2015 and not otherwise exempt or in the negative list.
Distinct nature of manpower supply services/ service of job work were clarified.