Customs duty changes in Indian Budget 2006-2007
Customs Duties2. Additional duty of Customs
2.1 The 4% special CV duty, under section 3(5) of the Customs Tariff Act, 1975 which was imposed last year only on ITA goods and their parts/components, has been extended in general to all imports. It will apply to both agricultural and industrial products. This additional duty will not be included in the assessable value for levy of education cess on imported goods. Manufacturers will be able to take credit of this additional duty for payment of excise duty on their finished products. Articles of jewellery will, however, attract a lower rate of special CVD at 1%.
2.2 Some categories of imports, however, have been exempted from this special CVD. These are:
(a) Goods exempt from VAT;
(b) Goods exempted both from basic and CV duty (including CV duty exemption by way of excise duty exemption);
(c) Petroleum crude, kerosene for PDS, LPG for domestic supply, petrol, diesel, coal, coke and petroleum gases and fuels of Chapter 27;
(d) Passenger baggage ;
(e) Fertilizers and inputs for fertilizers;
(f) DTA clearances of EOUs/EHTP/STP/SEZ units, provided such goods are not exempted from VAT/sales tax;
(g) Gold concentrate;
(h) Gold silver, rough and cut diamonds, precious metals, precious and semi- precious stones; and other goods of Chapter 71 excluding articles of jewellery;
(i) Ships for breaking up ;
(j) Non-mega power projects; transmission and distribution projects; and high voltage transmission equipments.
3. Peak rate of Duty3.1 Peak rate of customs duty on non-agricultural goods has been reduced from 15% to 12.5% with a few exceptions. As regards textiles, only the ad valorem component has been reduced to 12.5%, the specific component, wherever applicable, remains unchanged. The tariff rates in general are being amended accordingly. Since the reduction in tariff rates will come into effect only on enactment of the Finance Bill, 2006, the effective rates are being prescribed through notifications.
4. Metals and their inputs4.1 Customs duty has been reduced from 10% to 7.5% on primary and semi- finished forms of metals, namely, Ferro-alloys and other alloy steel (excluding seconds and defectives), Aluminium, Copper, Zinc, Tin, base metals of Chapter 81 and Calcined Alumina.
4.2 Customs duty has been reduced from 10% to 7.5% on ashes and residues of copper and zinc.
4.3 Customs duty has been reduced from 5% to 2% on mineral ores and concentrates.
4.4 Customs duty of 5% has been imposed on iron and steel melting scrap.
4.5 Concessional rate of 5% customs duty on nickel and articles of nickel has been restricted to goods falling under Chapter 75.
5. Refractories and their inputs5.1 Customs duty has been reduced from 10% to 7.5% on refractories.
5.2 Customs duty has also been reduced from 10% to 7.5% on raw materials for refractories, namely, natural graphite powder, aluminous cement, boron carbide, reactive alumina, silicon metal (99% purity), micro/fumed silica, brown fused alumina, fused zirconia, silicon carbide, sodium hexameta phosphate, sintered/tabular alumina and fused silica.
6. Mineral Products: Customs duty has been reduced from 15% to 5% on mineral products of Chapter 25, except for cement, marble, granite and asbestos.
7. Agriculture :7.1 Concessional rate of 5% customs duty + Nil CVD, presently available to specified plantation machinery upto 30.4.2006, has been extended by one more year.
7.2 Customs duty has been increased from 30% to 60% on honey.
7.3 Customs duty has been increased from 30% to 80% on vanaspati, bakery shortening, inter-esterified, re-esterified, elaidinised fats, margarine and similar boiled, oxidized, dehydrated, sulphurised, blown, polymerized or modified preparations of edible grade, falling under headings 1516, 1517 or 1518.
7.4 Customs duty has been reduced on Atlantic salmon from 30% to 10%.
8. Information Technology:8.1 Customs duty on Set Top Boxes, whether or not covered under ITA (Information Technology Agreement), has been unified at Nil customs duty plus 16% CV duty plus 4% special additional duty of customs.
8.2 CVD under Section 3(3) of the Customs Tariff Act on computers has been withdrawn consequent to imposition of excise duty at 12% on computers.
8.3 Customs duty on MP3 Players and MPEG4 Players has been reduced from 15% to 5%.
9. Petroleum Products:9.1 Customs duty has been reduced from 10% to 5% on naphtha and Petroleum Coke.
9.2 Customs duty on propane, butanes and natural gas, in any form, has been unified at 5%.
10. Chemicals and Petrochemicals:10.1 Customs duty on basic inorganic chemicals such as halogens, sulphur, carbon, hydrogen, falling under headings 2801 to 2805, has been reduced from 15% to 10%.
10.2 Customs duty on organic chemicals falling under headings 2901 to 2904, except chloromethanes and trichloroethylene, has been reduced from 10% to 5%.
10.3 Customs duty on methanol has been reduced from 15% to 10%.
10.4 Customs duty on Styrene, Ethylene Dichloride and Vinyl Chloride Monomer has been reduced from 5% to 2%.
10.5 Customs duty has been reduced from 10% to 7.5% on catalysts of heading 3815.
10.6 Customs duty has been reduced from 10% to 5% on Polymers of Ethylene (LDPE, LLDPE, HDPE, LHDPE, LMDPE), Polymers and copolymers of Propylene, Polymers and copolymers of Styrene and Polymers of Vinyl Chloride.
10.7 Customs duty on Ethyl Vinyl Acetate has been reduced from 10% to 5%.
10.8 Customs duty on naphtha for manufacture of specified polymers has been reduced from 5% to Nil.
11. Health :11.1 Customs duty on 14 specified anti-cancer and 10 specified Anti-AIDS drugs, and bulk drugs for their manufacture, has been reduced to 5% with Nil CVD by way of excise duty exemption.
11.2 Customs duty has been reduced to 5% on 4 specified drugs and bulk drugs for their manufacture. These drugs will be exempt from CV duty also by way of excise duty exemption.
11.3 Customs duty has been reduced to 5% on 2 specified diagnostic kits and 1 equipment. These kits/equipment will be exempt from CV duty also by way of excise duty exemption.
11.4 Customs duty on parts of hearing aids has been reduced from 5% to Nil.
12. Textiles12.1 Customs duty on man- made fibres, filaments yarns and spun yarns has been reduced from 15% to 10%.
12.2 Customs duty on DMT, PTA, MEG and Caprolactum has been reduced from 15% to 10%.
12.3 Customs duty on Paraxylene has been reduced from 5% to 2%.
12.4 Customs duty on specified textile machinery, and parts for manufacture of such machinery, has been reduced from 15% to 10%.
13. Withdrawal of exemptions: Customs duty exemptions/concessions have been withdrawn on following items:
1) Subbed polyester base, for the manufacture of medical or industrial X-ray films and graphic art films.
2) Saddle tree.
3) Parts of outboard motors imported by specified agencies.
4) Spare parts for maintenance of textile machinery.
5) Videocassettes and video tapes imported by Television Centre of All India Radio, or by M/s Electronic Trade and Technology Development Corporation Ltd or by others.
6) Food preparations containing flour, meal, starch, etc. in a specified proportion meant for infant use and put up for retail sale.
7) Food products (excluding alcoholic preparations) imported by hotels/tourism industry in terms of licenses issued under 1997-2002 Exim Policy.
8) Plant, machinery, equipment imported for setting up of Currency Note/Bank Note Press at Salbony, Mysore, Nasik and Dewas.
9) Exemption from CVD on gold concentrate. This exemption will continue by way of excise duty exemption on gold concentrate.
10) Specified goods for manufacture of capital goods for setting up of a unit with an investment of Rs 5 crore or more.
14. Miscellaneous :1) Customs duty has been reduced on:
(a) Non-edible grade industrial oils having Free Fatty Acid content of 20% or above, used for manufacture of soaps, industrial fatty acids and fatty alcohols, from 20% to 12.5%.
(b) Vinyl acetate monomer from 15% to 10%.
(c) Butyl rubber from 15% to 10%.
(d) Crude glycerine from 30% to 12.5%.
(e) 2-Vinyl pyridine from 15% to 10%.
(f) Metallurgical grade silicon from 15% to 10%.
(g) Borax/boric acid from 15% to 10%.
(h) Cullet (broken glass) from 15% to 5%.
(i) Parts of pens under heading 9608 from 15% to 5 %.
(j) Potassium chloride from 15% to 10%.
(k) Bisphenol- A and Epichlorohydrin, for the manufacture of Epoxy Resin, from 10% to 5%.
(l) Phenol/acetone, for manufacture of bisphenol, from 15% to 5%.
(m) Packaging machinery, falling under 8422 30 00 and 8422 40 00, from 15% to 5%.
2) A unified rate of 10% customs duty has been prescribed for glass frit and all other glass under tariff item 3207 40 00.
Presented by eximkey.com