INSTRUCTION DATE 07/09/2007

Exemption of Cess @ 0.05% on all Textiles and Textiles Machinery - regarding.
Please refer to the Notification S.O.860(E) dated 1.6.2007 issued by the Ministry of Textiles on the above mentioned subject (copy enclosed). It has been brought to the notice of the Board that textile cess is being collected by some of the Customs field formations despite the exemption from the whole of the cess being granted by the Government vide the aforesaid notification.

2. The issue was examined. Section 5A of the Textiles Committee Act, 1963 provide for imposition of cess on textiles and textile machinery manufactured in India and collected as a duty of excise at such rate as may be specified by the Central Government by Notification in the Official Gazette of India. This cess is also administered by the Department of Revenue and collected, interalia, on the imported textiles and textile machinery as countervailing duty. Notification issued by the Ministry of Textiles from time to time prescribe the effective rate at which the cess shall be levied and collected as duty of excise on such products. Prior to the issue of the aforesaid notification, the effective rate of cess on textiles and textile machinery was 0.05% ad valorem. However, with the issue of notification dated 1.6.2007 by the Ministry of Textiles, the Government have exempted from the levy of whole of such textile cess. Accordingly, no such textile cess is leviable w.e.f. 1.6.2007. Therefore, pending provisional assessments, if any, may be finalised accordingly.

3. In this regard, it has also come to the notice of the Board that Customs EDI directories reflecting the effective rate of duty have not been updated in certain commissionerates. In view of the above, Board directs that the jurisdictional Commissioner of Customs shall ensure updation of the ‘directories’ in the Customs EDI System periodically on the basis of the various notifications issued to reflect the correct position of the applicable duties on import and export.

The Systems Managers in charge of Customs EDI systems in all Customs formations may interalia ensure updation of the EDI directories on time, on the basis of the instructions / guidelines issued by the Directorate of Systems, to ensure collection of duties properly. In case of difficulties, if any, in updation of the Directories, they should consult the Directorate of Systems, New Delhi for necessary guidance.

F.No.528/68/2007-Cus(TU)

Yours faithfully,

(M.M. Parthiban)
Director (Customs)
Tel.No.23093908

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