change in Excise Duty in Budget ( See at Annexure II)

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Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
*****
P. K. Mohanty
Joint Secretary (TRU-I)
Tel: 23092687
Fax: 23092031
Email: pk.mohanty@nic.in
D.O.F.No.334/ 3/2013-TRU
New Delhi, dated the 28th February, 2013.
Dear Chief Commissioner/ Commissioner,
The Finance Minister has introduced the Finance Bill, 2013 in Lok Sabha today, i.e., 28th February, 2013. Changes in Customs and Central Excise law and rates of duty have been proposed through the Finance Bill, 2013 (clauses 54 to 77 for Customs and clauses 78 to 92 for Central Excise). In order to prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, the following notifications are being issued:
CUSTOMS:
Notification Nos.
Date
Tariff
No. 9 /2013-Customs to No.15 /2013-Customs
1st March, 2013
Non-Tariff
No. 25 /2013-Customs(NT)
1st March, 2013
CENTRAL EXCISE
Tariff
No. 5 /2013-CE to No. 12 /2013-CE
1st March, 2013
Non-Tariff
No. 1 /2013-CE (NT) to No. 4 /2013-CE (NT)
1st March, 2013
Unless otherwise stated, all changes in rates of duty take effect from the midnight of 28th February/1st March, 2013. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 76, 77(b), 91 and 92 of the Finance Bill, 2013 so that changes proposed therein also take effect from the midnight of 28th February/1st March, 2013. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2013. Retrospective amendments in the provisions of law or notification issued under the respective Acts shall have the force of law only upon the enactment of the Finance Bill, 2013 but with effect from the date indicated in the relevant clause or Schedule. These dates may be carefully noted.
2. Important changes in respect of Customs and Central Excise duty and legislative changes are contained in the three Annexes appended to this letter. Annex I contains Chapter wise changes relating to Customs; Annex II contains Chapter wise changes relating to Central Excise. These
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Annexes also contain a few clarifications. Annex III provides a bird’s eye view of legislative changes proposed in the Finance Bill, 2013.
2.1 The Annexes provide a summary of the changes made and should not be used in any quasi-judicial or judicial proceedings, where only the relevant legal texts need to be referred to.
3. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which alone have legal force. My team and I have made every possible effort to avoid the occurrence of errors or mistakes in the Budget documents. However, given the scale of changes, inadvertent errors cannot be ruled out. I shall be grateful if the provisions of the Finance Bill are studied carefully and feedback on issues that may need clarification is provided urgently.
4. It may kindly be ensured that the changes are implemented in a smooth manner without causing any inconvenience to the taxpayers and other stakeholders. All possible efforts may be made to guide the taxpayers by holding interactive sessions/ seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately or to the notice of Shri Amitabh Kumar, Director (TRU) (Tel No.011-23092236; e-mail: amitabh.kumar@nic.in, Sh. G. G. Pai, Director (TRU) (Tel No. 011-23092753; e-mail: giridhar.pai@nic.in or Sh. Prashant Kumar Jha, Budget Officer (TRU) (Tel No. 011-23094819; e-mail: prashantk.jha@nic.in ). We can also be reached at budget-cbec@nic.in.
5. Copies of Finance Bill, 2013, Finance Minister’s Budget Speech, Explanatory Memorandum to the Bill, relevant notifications can be downloaded directly from www.indiabudget.nic.in as well as www.cbec.gov.in.
6. To conclude, my team and I would like to express my gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/ suggestions.
With warm regards,
Yours sincerely,
(P. K. Mohanty)
To
All Chief Commissioners/ Directors General
All Commissioners of Customs
All Commissioners of Central Excise
All Commissioners of Customs and Central Excise
All Commissioners of Service Tax
Director DPPR/ Logistics/Legal Affairs/ Data Management



Annex II

CENTRAL EXCISE

Chapter 1 to 10: No change
Chapter 11
11.1 Tapioca starch manufactured and consumed captively in the manufacture of tapioca sago (sabudana) is being exempted from excise duty. Notification No.12/2012-CE, dated 17th March, 2012 as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers. S. No 8A contains the changes.
Chapter 12-14: No change
Chapter 15
15.1 Sub-heading 1517 90 20 (peanut butter) is being deleted from the First Schedule to the Central Excise Tariff Act, 1985. An amendment has been proposed in the Finance Bill, 2013 (Clause 92 read with the Sixth Schedule) to delete the current sub-heading 1517 90 20 and entries relating thereto from the Tariff. Hereafter, peanut butter will be classified under sub-heading 2008 11 00. At present, sub-heading 1517 90 20 as well as sub-heading 2008 11 00 of the Central Excise Tariff carries a tariff rate of 6%. However, the applied rate is Nil for sub-heading 1517 90 20. The exemption is being continued. In this connection, notification No. 12/2012-CE, as amended by notification No.12/2013-CE, dated 1st March, 2013 refers. S. No 13A contains the changes.
Chapter 16-18: No change
Chapter 19
19.1 Tapioca sago (Sabudana) is being exempted from excise duty. Notification No.12/2012-CE, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers. S. No 24A contains the changes.
Chapter 20 -23: No change
Chapter 24
24.1 Basic excise duty on cigarettes and other products of tariff heading 2402 is being increased. Clause 92 of the Finance Bill, 2013 read with the Sixth Schedule may be referred to for details. By virtue of the Provisional Collection of Taxes Act, 1931, the levies will come into
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force with immediate effect. There is no change in NCCD and Health Cess rates. The changes in basic excise duty rates are summarized below.
Cigarettes
TARIFF
ITEM
DESCRIPTION
(length in mm)
BED
Rs. per 1000 sticks
(Existing Rate)
BED
Rs. per 1000 sticks
(New Rate)
24022010
Non filter not exceeding 65
509
No change
24022020
Non-filter exceeding 65 but not exceeding 70
1463
1772
24022030
Filter not exceeding 65
509
No change
24022040
Filter exceeding 65 but not exceeding 70
1034
1249
24022050
Filter exceeding 70 but not exceeding 75
1463
1772
24022060
Filter exceeding 75 but not exceeding 85
1974
2390
24022090
Other
2373
2875
Cigar, Cheroots and Cigarillos:
TARIFF ITEM
DESCRIPTION
BED
(Existing Rate)
BED
(New Rate)
2402 10 10
Cigar and cheroots
12% or Rs.1370 whichever is higher
12% or Rs.1781 whichever is higher
2402 10 20
Cigarillos
12% or Rs.1370 whichever is higher
12% or Rs.1781 whichever is higher
2402 90 10
Cigarettes of Tobacco Substitutes
Rs.1258 per thousand
Rs.1511 per thousand
2402 90 20
Cigarillos of Tobacco Substitutes
10% or Rs.1473 whichever is higher
12% or Rs.1738 whichever is higher
2402 90 90
Other
10% or Rs.1473 whichever is higher
12% or Rs.1738 whichever is higher
Chapter 25
25.1. Basic excise duty is being increased on marble slabs and tiles from ` 30 per square meter to ` 60 per square meter. S.No.54 of notification No.12/2012-CE, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers.
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25.2 Under notification No.12/2012-CE (S.No.55), sulphur recovered as by product in refining of crude oil (sub-heading 2503 00 10) used for the manufacture of fertilisers is exempt from excise duty. "Fertilizers" include bentonite sulphur and hence, sulphur under sub-heading 2503 00 10 used for manufacture of bentonite sulphur is exempt from excise duty. An Explanation has been inserted below the entry against S. No.55 to place the matter beyond doubt. Notification No. 12/2013-CE dated 1st March, 2013 may be referred to for details.
Chapter 26-29: No change
Chapter 30
30.1 Branded Ayurvedic medicaments and medicaments of Unani, Siddha, Homeopathy or Bio-chemic system are being brought under MRP based assessment with an abatement of 35% from the MRP. Ayurvedic medicaments as well as medicaments of Unani, Siddha, Homeopathy or Bio-chemic System (generic as well as branded) have been included in the Third Schedule to the Central Excise Tariff Act, 1944. In this connection, clause 91 of the Finance Bill 2013 read with the Fifth Schedule and notification No. 1/2013-C.E. (NT) dated 1st March, 2013 refer. By virtue of the Provisional Collection of Taxes Act, 1931, the changes will come into force with immediate effect.
Chapter 31 and 32: No change
Chapter 33
33.1 Henna powder or paste, not mixed with any other ingredient is being exempted from excise duty. S No 134 of notification No 12/2012-CE, as amended by notification No 12/2013-CE, dated 1st March 2013 refers.
Chapter 34 -38: No change.
Chapter 39
39.1 S. No. 146 and the entries relating thereto are being deleted from notification No. 12/2012-CE, as a general exemption is being issued. Notification No. 7/2013-CE dated 1st March 2013 may be referred to for details.
Chapter 40-56: No change.
Chapter 57
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57.1 All handmade carpets and carpets & other textile floor coverings of coir and jute, whether or not handmade, falling under Chapter 57, are being fully exempted from excise duty. In this connection, notification No. 12/2012-CE as amended by notification No. 12/2013-C.E. dated 1st March, 2013 refers. S. No 173A contains the changes. Consequently, the entries against S. No. 72 of notification No. 1/2011-CE, dated 1st March, 2011 and S. No. 37 of notification No. 2/2011-CE, dated 1st March, 2011 are being omitted. Notification No. 9/2013-CE and 10/2013-CE, both dated 1st March, 2013 may be referred to.
Chapter 58-60: No change.
Chapter 61-63
61.1 Zero excise duty route, as existed prior to Budget 2011-12, is being restored on readymade garments and made ups. The zero excise duty route will now be available in addition to the CENVAT route under which manufacturers can pay excise duty on the final product and avail of credit of duty paid on inputs. S.No.16 of notification No. 30/2004-CE dated the 9th July, 2004 as amended by notification No.11/2013-CE dated the 1st March, 2013 and S. No.7 of notification No. 7/2012-CE dated 17th March,2012, as amended by notification No. 8/2013- CE dated the 1st March, 2013 may be referred to for details.
Chapter 64 to 67: No change
Chapter 68
68.1 Excise duty on marble slabs and tiles is being increased from ` 30 per square meter to ` 60 per square meter. S. No. 54 of the notification No. 12/2012-CE, as amended by notification No.12/2013-CE dated 1st March, 2013 refers.
Chapter 69 to 70: No change
Chapter 71
71.1 Excise duty of 4% is being imposed on silver produced or manufactured during the process of zinc or lead smelting starting from the stage of zinc or lead ore or concentrate. Notification No.12/2012-CE, as amended by notification No.12/2013-CE, dated the 1st March 2013 refers. S. No 191A contains the changes.
Chapter 72
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72.1. The compounded duty rate on stainless steel “patta- patti” is being increased from Rs 30,000 per machine per month to Rs 40,000 per machine per month. Notification No. 17/2007-CE, dated 1st March, 2007 as amended by notification No. 5/2013-CE, dated 1st March 2013 refers.
Chapter 73: No change
Chapter 74
74.1 Under notification 12/2012-CE (S. No. 217), trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils attract excise duty of Rs 3,500 per metric tonne. For the purposes of this entry, by way of an explanation, it is clarified that copper means copper and copper alloys including brass. Notification No. 12/2012-CE, as amended by notification No. 12/2013-CE dated 1st March, 2013 refers.
Chapter 75: No change.
Chapter 76
76.1. Sub-heading 7615 19 10 (pressure cookers) is being replaced by sub-heading 7615 10 11 in the Third Schedule to the Central Excise Act, 1944. An amendment has been proposed in the Finance Bill, 2013 (Clause 91 read with the Fifth Schedule). This is basically a technical rectification. In this connection, notification No. 12/2012-CE, as amended by notification No.12/2013-CE, dated 1st March, 2013 refers. S. No 212 contains the changes. Relevant changes are also being made in notification No.49/2008(NT) dated 24th December, 2008 as amended by notification No. 1/2013-CE(NT) dated 1st March,2013.
Chapter 77-84: No change.
Chapter 85
85.1 Excise duty on mobile handsets including cellular phones having retail sale price more than Rs. 2000/- is being increased from 1% to 6%. The duty on mobile phones priced up to and inclusive of Rs. 2000 (retail sale price) would remain unchanged. Notification No. 12/2013-CE, dated 1st March, 2013 (S. No. 263A) provides the details. Consequently notification No. 20/2011-CE, dated 24th March, 2011 is being rescinded. Notification No. 6/2013-CE, dated 1st March 2013 refers.
Chapter 86: No change
Chapter 87
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87.1 The validity period of concessional excise duty of 6% granted to specified parts of hybrid and electric vehicles is being extended by two more years up to 31st March, 2015. Proviso to notification No.12/2012-C.E, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers.
87.2 The excise duty on chassis of diesel motor vehicles for the transport of goods (8706 00 42) is being reduced from 14% to 13%. In this connection, notification No.12/2012-C.E, as amended by notification No. 12/2013-CE, dated the 1st March 2013 refers. S. No.s 292A and 292B contain the changes.
87.3 Excise duty on SUVs (including utility vehicles falling under CTH 8703) and engine capacity >1500 cc is being increased from 27% to 30 %.( Clause 92 of the Finance Bill, 2013 read with the Sixth Schedule). The SUV has been defined in the notification No. 12/2013-CE dated 1st March, 2013. S. No. 284A contains the changes. By virtue of the Provisional Collection of Taxes Act, 1931, the levy will come into force with immediate effect.
87.4 The taxi refund in respect of SUVs is being adjusted with a view to ensuring that the duty increase does not affect SUVs used as taxis. Now, in respect of SUVs the refund of 28% of the excise duty paid at the time of clearance would be applicable. Notification No.12/2012-CE, as amended by notification No. 12/2013-CE dated 1st March, 2013 may be referred to for details. S.No.s 284 and 284A contains the changes.
Chapter 88: No change.
Chapter 89
89.1 Excise duty on ships, tugs and pusher craft, dredgers and other vessels falling under CETH 8901, 8904, 8905, 8906 90 00 is being exempted. Notification No.12/2012-CE, as amended by notification No. 12/2013-CE dated 1st March, 2013 may be referred to for details.
Chapter 90-96: No change.
Miscellaneous:
Goods manufactured and captively consumed within the factory of production in the manufacture of final products in respect of which exemption is claimed under the Area Based Exemption Scheme under notification Nos. 49/2003-CE and 50/2003-CE, both dated 10th June 2003 (available for Uttarakhand and Himachal Pradesh) is being exempted from excise duty. Notification No. 7/2013-CE dated the 1st March 2013 may be referred to for details.
*****
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Annex III
LEGISLATIVE CHANGES
Advance Ruling
Section 28E of the Customs Act, 1962 defines “advance ruling”. “Advance ruling” means “the determination, by the Advance Ruling Authority, of a question of law or fact specified in the application regarding the liability to pay in relation to an activity which is proposed to be undertaken by the applicant”. “Activity” is defined to mean “import or export”. The definition of “activity” is being expanded to include any new business of import or export so as to enable such importer or exporter to seek advance ruling when he starts a new line of business. Similar amendment has been proposed in section 23A of the Central Excise Act, 1944. “Activity” now includes any new business of production or manufacture by the existing producers or manufacturers. This will enable such producers or manufacturers to seek advance ruling when starting a new line of business.
Under 23 (C) (e) of the Central Excise Act, 1944, an advance ruling can be sought, inter- alia, on the issue of admissibility of credit of excise duty paid or deemed to have been paid on the goods used in/ in relation to the manufacturer of excisable goods. This section is being amended so as to extend the advance ruling provisions also to the admissibility of the credit of service tax paid on or deemed to have been paid on input services used in the manufacture of excisable goods.
Under section 28E of the Customs Act, 1962, only a select category of persons are eligible for advance ruling. This includes joint ventures and resident public limited companies. Presently, the latter category is not eligible for advance ruling under the Central Excise law. Notifications are being issued to make “resident public limited companies” eligible for seeking advance ruling on central excise and service tax matters as is available on the Customs side
Arrests and Prosecutions
Section 104 of the Customs Act, 1962 contains provisions relating to arrest. This section is being amended to make certain offences punishable under section 135 as non-bailable. The offences are:
(a) Evasion or attempted evasion of duty exceeding Rs. fifty lakh;
(b) Prohibited goods notified under section 11 which are also notified under sub-clause (C) of clause (i) of sub-section (1) of section 135;
(c) Import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds Rs. one crore;
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(d) Fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds Rs. fifty lakh.
Barring the offences mentioned above, all other offences under the Customs Act are bailable. Similar changes have been proposed in the Central Excise Act, 1944 and Finance Act, 1994 (relating to Service tax).
Stay Order by Appellate Tribunal and Other Matters
Section 35C (2A) of the Central Excise Act, 1944 and the corresponding provisions under section 129B (2A) of the Customs Act, 1962 are being amended to provide for a maximum ceiling of 365 days up to which the Tribunal can grant stay of recoveries. By inserting a proviso in the abovementioned sections, it is being stipulated that after 365 days from the stay order, this stay shall stand vacated even if the disposal of the case is pending for no fault of the assessee. By virtue of stipulation under section 86(7) of the Finance Act, 1994, the provisions of the Central Excise Act would be applicable for dispute in Service Tax matters.
Section 129C is being amended to enhance the monetary limit of the Single Bench of the Tribunal to hear and dispose of appeals from Rs.10 lakh to Rs.50 lakh. Corresponding changes have been made in Section 35D of the Central Excise Act, 1944.
Other Amendments in the Customs Act, 1962
(i) Section 11: “Designs and geographical indications” have been included along with patents, trade mark and copy rights to enable the Central government to prohibit either absolutely or conditionally the import or export of goods to protect these legal rights;
(ii) Section 27: Where the amount of refund claimed is less than Rs 100/-, the same shall not be refunded;
(iii) Section 28: Show Cause Notice shall not be served where the amount involved is less than Rs 100/-;
(iv) Section 28BA: This section is being amended to provide for provisional attachment of property belonging to any person to whom notice under sub-section (4) of section 28 has been served.
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(v) Section 29: This section is being amended to empower Board to allow landing of vessels or aircrafts at any place other than customs ports or customs airports.
(vi) Section 30 and Section 41: These sections are being amended to provide for electronic filing of Import General Manifest/Export General Manifest. It is also being provided that where this is not feasible, the Commissioner may allow the delivery of such manifest in any other manner.
(vii) Section 47: This section is being amended reduce the interest free period for payment of import duty from 5 days to 2 days;
(viii) Section 49: This section deals with storage of imported goods in a warehouse pending clearance. This section is amended to provide a time limit of 30 days for storage of goods in the interest of accountability and early finalization of assessments. The Commissioner may extend the period of storage for a further period not exceeding 30 days at a time.
(ix) Section 69: This section deals with export of warehoused goods. The document listed under the section is Shipping Bill or Bill of Export. This section is being amended to allow export of warehoused goods under postal export document;
(x) Section 135: In sub-clauses (B) and (D) of clause (i) of section 135(1), the threshold limit for punishment in an offence relating to evasion or attempted evasion of duty or fraudulently availing of or attempting to avail of drawback or any exemption from duty in connection with export of goods,has been increased from Rs.30 lakh to Rs.50 lakh.
(xi) Section 142: A new clause (d) is being inserted in section 142 to provide (i) for recovery of money due to the Central Government from any other person other than the defaulter after giving such other person a notice in writing, (ii) that the person to whom such notice has been issued shall be bound to comply, and (iii) that if the person to whom the notice is issued fails to comply, he shall be deemed to be a defaulter in respect of the amount specified in the notice.
(xii) Section 143A is being omitted.
(xiii) Section 144: Sub-section (3) of section 144 is being amended to remove the duty liability on any sample of goods which is consumed or destroyed during the course of testing or examination.
(xiv) Section 146 is being substituted to change the nomenclature of “customs house agents” to “customs brokers” considering the global practice and internationally accepted nomenclature.
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(xv) Section 146A is being amended so as to:- (a) substitute the phrase “customs house agent” with the phrase “customs broker”; (b) include any offence committed under the Finance Act, 1994 as a disqualification for person to act as an authorized representative in customs matters.
(xvi) Section 147: Sub-section (3) of section 147 is being amended to expand the scope of the liability of agents of the owner, importer or exporter of any goods. It now casts equal responsibility on agents for making correct self-assessment.
Other Amendments in the Central Excise Act
(i) Section 9 provides that an offence case involving evasion in which the duty leviable exceeds thirty lakh rupees shall be punishable with a term of imprisonment extending to seven years with fine. This section is being amended so as to substitute the amount of thirty lakh rupees with fifty lakh rupees.
(ii) Section 9A is being amended to make an offence cognizable and non-bailable where the duty liability exceeds Rs.50 lakh and punishable under clause (b) or clause (bbbb) of sub-section (1) of section 9.
(iii) Section 11 is being amended so as to provide for (i) recovery of money due to the Government from any person other than from whom money is due after giving a proper notice, if that other person holds money for or on account of the first person; (ii) the other person to whom
such notice has been issued is bound to comply and (iii) if the other person to whom the notice is served fails to comply, he shall face all the consequences under this Act.
(iv) Section 11A is being amended to insert sub-section (7A) providing that service of a statement containing details of duty not paid, short levied or erroneously refunded shall be deemed to be a service of notice under sub-section (1) or (3) or (4) or (5) of this section.
Reference to sub-section (1) in section 11DDA is being omitted.
(v) Section 20 is being amended so as to make the provisions applicable only to offence which is non-cognizable.
(vi) Section 21 is being amended so as to make the provisions regarding release of arrested person on bail or personal bond applicable only to offence which is non-cognizable.
(vii) Section 37C is being amended to specify additional modes of delivery of specified documents i.e. by speed post with proof of delivery or through courier approved by the Central Board of Excise & Customs.
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These are the broad changes made through the various clauses of the Finance Bill, 2013. The relevant clauses may kindly be perused to find out the precise changes made.
*****

Change in Customs Tariff in new Budget 2013

Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
*****
P. K. Mohanty
Joint Secretary (TRU-I)
Tel: 23092687
Fax: 23092031
Email: pk.mohanty@nic.in
D.O.F.No.334/ 3/2013-TRU
New Delhi, dated the 28th February, 2013.
Dear Chief Commissioner/ Commissioner,
The Finance Minister has introduced the Finance Bill, 2013 in Lok Sabha today, i.e., 28th February, 2013. Changes in Customs and Central Excise law and rates of duty have been proposed through the Finance Bill, 2013 (clauses 54 to 77 for Customs and clauses 78 to 92 for Central Excise). In order to prescribe effective rates of duty and to carry out changes in the Rules made under the respective Acts, the following notifications are being issued:
CUSTOMS:
Notification Nos.
Date
Tariff
No. 9 /2013-Customs to No.15 /2013-Customs
1st March, 2013
Non-Tariff
No. 25 /2013-Customs(NT)
1st March, 2013
CENTRAL EXCISE
Tariff
No. 5 /2013-CE to No. 12 /2013-CE
1st March, 2013
Non-Tariff
No. 1 /2013-CE (NT) to No. 4 /2013-CE (NT)
1st March, 2013
Unless otherwise stated, all changes in rates of duty take effect from the midnight of 28th February/1st March, 2013. A declaration has been made under the Provisional Collection of Taxes Act, 1931 in respect of clauses 76, 77(b), 91 and 92 of the Finance Bill, 2013 so that changes proposed therein also take effect from the midnight of 28th February/1st March, 2013. The remaining legislative changes would come into effect only upon the enactment of the Finance Bill, 2013. Retrospective amendments in the provisions of law or notification issued under the respective Acts shall have the force of law only upon the enactment of the Finance Bill, 2013 but with effect from the date indicated in the relevant clause or Schedule. These dates may be carefully noted.
2. Important changes in respect of Customs and Central Excise duty and legislative changes are contained in the three Annexes appended to this letter. Annex I contains Chapter wise changes relating to Customs; Annex II contains Chapter wise changes relating to Central Excise. These
2
Annexes also contain a few clarifications. Annex III provides a bird’s eye view of legislative changes proposed in the Finance Bill, 2013.
2.1 The Annexes provide a summary of the changes made and should not be used in any quasi-judicial or judicial proceedings, where only the relevant legal texts need to be referred to.
3. In order to achieve a sharper focus, I have alluded only to the key highlights of the budgetary changes in this communication. The details are contained in the Finance Bill and notifications which alone have legal force. My team and I have made every possible effort to avoid the occurrence of errors or mistakes in the Budget documents. However, given the scale of changes, inadvertent errors cannot be ruled out. I shall be grateful if the provisions of the Finance Bill are studied carefully and feedback on issues that may need clarification is provided urgently.
4. It may kindly be ensured that the changes are implemented in a smooth manner without causing any inconvenience to the taxpayers and other stakeholders. All possible efforts may be made to guide the taxpayers by holding interactive sessions/ seminars for their benefit. In case of any doubt or difficulty, I would request you to kindly bring it to my notice immediately or to the notice of Shri Amitabh Kumar, Director (TRU) (Tel No.011-23092236; e-mail: amitabh.kumar@nic.in, Sh. G. G. Pai, Director (TRU) (Tel No. 011-23092753; e-mail: giridhar.pai@nic.in or Sh. Prashant Kumar Jha, Budget Officer (TRU) (Tel No. 011-23094819; e-mail: prashantk.jha@nic.in ). We can also be reached at budget-cbec@nic.in.
5. Copies of Finance Bill, 2013, Finance Minister’s Budget Speech, Explanatory Memorandum to the Bill, relevant notifications can be downloaded directly from www.indiabudget.nic.in as well as www.cbec.gov.in.
6. To conclude, my team and I would like to express my gratitude to you for the valuable suggestions, feedback and support and would look forward to your comments/ suggestions.
With warm regards,
Yours sincerely,
(P. K. Mohanty)
To
All Chief Commissioners/ Directors General
All Commissioners of Customs
All Commissioners of Central Excise
All Commissioners of Customs and Central Excise
All Commissioners of Service Tax
Director DPPR/ Logistics/Legal Affairs/ Data Management
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Annex I
CUSTOMS
Chapter 1 to 7: No change
Chapter 8
8.1 The basic customs duty (BCD) on hazel nuts is being reduced from 30% to 10%. Notification No.12/2012-Customs, dated 1st March, 2012 as amended by notification No. 12/2013-Customs, dated 1st March, 2013 refers. S. No. 23A contains the changes.
8.2 In notification No 12/2012-Customs, at S. No. 24 of the Table, sub-heading 0802 50 00 (Pistachios) is being replaced by sub-headings 0802 51 00 and 0802 52 00. This is a technical rectification.
Chapter 9 to 10: No change
Chapter 11
11.1 The BCD on de-hulled oat grain is being reduced from 30% to 15%. Notification No.12/2012-Customs, dated 1st March, 2012 as amended by notification No. 12/2013-Customs, dated 1st March, 2013 refers. S. No. 38A contains the changes.
Chapter 12 and 14: No change.
Chapter 15
15.1 Peanut butter is presently classified under sub-heading 1517 90 20 of the Customs Tariff whereas, under the Harmonised System, peanut butter is classified under sub-heading 2008 11. To align our Tariff Schedule with HSN, an amendment has been proposed in the Finance Bill, 2013 (Clause 76 read with Third Schedule) to delete the current sub-heading 1517 90 20 and entries relating thereto from the Tariff. By virtue of this amendment, hereafter, the peanut butter will fall under sub-heading 2008 11, which is the correct classification as per the HSN.
15.2 Presently, peanut butter attracts a concessional BCD of 7.5% under notification No. 12/2012-Customs (S. No 71 of the Table). In view of the amendment referred to above, sub-heading 1517 90 20 is being deleted from S. No. 71. However, the concessional duty is being continued under notification No. 12/2012-Customs at new S. No. 88A. In the connection, notification No. 12/2013-Customs refers.
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Chapter 16: No change
Chapter 17
17.1 Raw sugar, white or refined sugar (1701) has been included in the Second Schedule to the Customs Tariff Act, 1975 (Export Schedule) vide Clause 77 read with Fourth Schedule of the Finance Bill, 2013 with a tariff rate of 20%. Exemption is however provided under notification No 27/2011-Customs dated 1.3.2011, as amended by notification No 15/2013-Customs, dated the 1st March 2013. Thus, raw sugar, white or refined sugar will not attract any export duty.
Chapter 18-22: No change
Chapter 23
23.1 De-oiled rice bran oil cake is being exempted from export duty. S. No. 12 of notification No. 27/2011-Customs, dated 1st March 2011, as amended by notification No.15/2013-Customs, dated 1st March 2013 refers.
Chapter 24 and 25: No change
Chapter 26
26.1 Bauxite and ilmenite are being incorporated in the Second Schedule to the Customs Tariff Act, 1975 (Export Schedule) with a tariff rate of 30%. (Clause 77 read with the Fourth Schedule to the Finance Bill, 2013). However, the effective duty is being prescribed at 10% on bauxite (2606 0010 and 2606 0020) and unprocessed ilmenite (2614 0010) and at 5% on upgraded ilmenite (2614 00 20). In this connection, notification No. 27/2011-Customs dated the 1st March as amended by notification No.15/2013-Customs, dated 1st March 2013 refers. New S. Nos. 24A, 24B, 24C and 24D contain the changes. By virtue of the Provisional Collection of Taxes Act, 1931, the levies will come into force with immediate effect.
Chapter 27
27.1 The BCD on bituminous coal is being reduced from 5 % to 2 % and CVD from 6 % to 2 %. The BCD on steam coal is being raised from Nil to 2% and CVD from 1% to 2%. Hereafter, both steam coal and bituminous coal will attract a uniform rate of 2% BCD and 2% CVD. Notification No.12/2012-Cus, as amended by notification No. 12/2013-Customs refers. Changes are contained in S. Nos 122 A, 123 and 124 of the Table.
Chapter 28-49: No change.
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Chapter 50
50.1 The BCD on raw silk is being increased from 5% to 15%. S. No.276 of notification No.12/2012-Customs, as amended by notification No.12 /2013-Customs, dated the 1st March 2013 refers.
Chapter 51 and 52: No change
Chapter 53
53.1 Presently, coir yarn (53.08) is mentioned at S. No. 43 of notification No. 27/2011-Customs. In column (4), which is presently blank, the entry Nil is being inserted. This is a technical rectification. In this connection, notification No.15 /2013-Customs, dated the 1st March 2013 refers.
Chapter 54 - 70: No change
Chapter 71
71.1 Basic customs duty is being reduced on pre-forms of precious and semi-precious stones from 10% to 2%. Notification No.12/2012-Customs, dated 1st March, 2012 as amended by notification No.12/2013-Customs, dated 1st March, 2013 refers. S. No.312A contains the changes.
71.2. Under the Foreign Trade Policy (paragraph 4A.2.2), an exporter with annual export turnover of Rs 5 crore for each of the last three years is allowed to export cut & polished diamonds (each of 0.25 carat or more) abroad to any of the designated laboratories/agencies with re-import facility at zero duty within 3 months from the date of export. In this regard, a variance not exceeding +_1mm in height and circumference and not exceeding +_1 cent in weight is allowed between exported and re-imported cut and polished diamonds. In this connection, Explanation 1 of notification No. 9/2012-Customs, dated the 9th March, 2012 refers. This limit is being revised in respect of height and circumference from +_1 mm to +_0.01 mm. The variation in respect of weight shall remain unchanged. Notification No. 9/2012-Customs, dated the 9th March, 2012 as amended by notification No. 11/2013-Customs, dated the 1st March, 2013 may be referred to for details.
Chapter 72
72.1 Flat rolled products of iron or non-alloy steel, plated or coated with zinc (sub-headings 7210 30 10, 7210 30 90, 7210 41 00, 7210 49 00, 7212 20 10, 7212 20 90, 7212 30 10 and 7212
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30 90) are being exempted from export duty retrospectively from 1st March 2011. In this connection, clauses 75 and 77 of the Finance Bill, 2013 may be referred to for details. The changes will come into force upon enactment of the Finance Bill. In the meanwhile, export duty may not be collected on the afore-cited product. Prior to 1st March 2011, this product was exempt from export duty under notification No. 77/2008-Customs, dated 13th June 2008.
Chapter 73
73.1. Under notification No 12/2012-Customs (S No. 371), specified goods for manufacture of catalytic convertors and their parts attract a concessional BCD of 5%. Stainless Steel Wire Cloth Stripe (sub-heading 7314 14 10) and Wash Coat (sub-heading 3824 90 90) are being added to the list for availing of concessional duty of 5%.
Chapter 74-83: No change.
Chapter 84
84.1 The BCD on 20 specified machinery for use in the leather industry or footwear industry is being reduced from 7.5% to 5%. Descriptions of certain leather and footwear machinery items are being modified. S No 390 (List 29) of notification No. 12/2012-Cus, as amended by notification No. 12/2013-Customs, dated the 1st March 2013 refers.
84.2 The BCD on all textile machinery and parts thereof falling under headings 8444 to 8449 is being reduced from 7.5% to 5%. Notification No.12/2012-Customs, dated 1st March, 2012 as amended by notification No. 12/2013-Customs, dated 1st March, 2013 refers. S. No. 406A contains the changes.
Chapter 85
85.1 The BCD on Integrated Decoder Receiver, also known as Set Top Box, is being increased from 5% to 10%. S. No411 of notification No.12/2012-Customs, as amended by notification No. 12 /2013-Customs, dated the 1st March 2013 refers.
85.2 LCD and LED TV Panels of 19” and above are presently exempt from BCD under notification No 12/2012-Customs (S. No. 432). In this connection, a doubt has been raised whether this exemption is available for LCD and LED TV Modules or otherwise. It is clarified that LCD and LED TV Panels and LCD and LED TV Modules are one and the same thing for the purpose of exemption under this notification.
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85.3 Presently, all goods required for the manufacture of the goods falling under heading 8541 are exempt from BCD subject to actual user condition. Solar cells and solar modules are classified under heading 85.41. It has been brought to the notice of the Ministry that this exemption has been denied at certain places although the imported goods are required for the manufacture of solar cells and solar modules. It is clarified that the BCD exemption under S No 39 of notification No. 24/2005-Customs, dated 1st March, 2005 is available to all goods including chemicals and electronic parts required for the manufacture of solar cells whether or not assembled in modules or panels.
Chapter 86: No change
Chapter 87
87.1 The validity period of exemption granted to identified parts of hybrid and electric vehicles is being extended by two more years up to 31st March, 2015. Clauses (g) and (h) of Proviso to notification No.12/2012-Customs, as amended by notification No. 12/2013-Customs, dated the 1st March 2013 refers.
87.2 BCD is being exempted on lithium ion automotive battery for manufacture of lithium ion battery packs for supply to the manufacturers of hybrid and electric vehicles. Notification No.12/2012-Customs (S. No 438), as amended by notification No. 12/2013-Customs, dated the 1st March 2013 refers.
87.3 At present, cars and other motor vehicles, new with FOB value more than US $ 40,000 and with engine capacity more than 3000 cc for petrol-run vehicles and more than 2500 cc for diesel-run vehicles attract a BCD of 75%. In this connection, notification No 12/2012- Customs (S No 437, (2) (a) of the Table) refers. The entry is being amended to read: “...with CIF value more than US $ 40,000 or with engine capacity more than 3000 cc for petrol-run vehicles and more than 2500 cc for diesel-run vehicles or with both”. Further, the BCD on these cars/motor vehicles is being increased from 75% to 100%. Thus, hereafter, these cars/ motor vehicles with CIF value more than US $ 40,000 would attract 100% BCD regardless of engine capacity. Similarly, regardless of value, cars/motor vehicles with engine capacity more than 3000 cc for petrol-run vehicles and more than 2500 cc for diesel-run vehicles would attract BCD at 100%. S.
No 437 of notification No.12/2012-Cus, as amended by notification No. 12/2013-Cus, dated the 1st March 2013 refers.
87.4 The BCD on import of old cars is being increased from 100% to 125%. Clause 76 of the Finance Bill 2013 refers. By virtue of the Provisional Collection of Taxes Act, 1931, the levy will come into force with immediate effect.
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87.5 The BCD on new motorcycles with engine capacity of 800cc or more is being increased from 60% to 75%. Notification No.12/2012-Customs (S No 443), as amended by notification No. 12 /2013-Customs, dated the 1st March 2013 may be referred to for details.
Chapter 88
88.1 Exemption from education cess and secondary & higher education cess is being withdrawn on aeroplanes, helicopters and their parts. For this purpose, S Nos 51 and 52 and entries relating thereto are being deleted from notification No 69/2004-Customs, dated 9th July 2004. The relevant entry at S. No 1 is also being deleted. In this connection, notification No. 9/2013- Customs, dated 1st March 2013 refers.
88.2 The time period for consumption/installation of parts and testing equipment imported for maintenance, repair and overhaul (MRO) of aircraft by units engaged in such activities is being increased from 3 months to 1 year. S. No.448 of notification No.12/2012-Customs (Condition 73), as amended by notification No. 12/2013-Customs, dated the 1st March 2013 refers.
88.3 The customs duty exemption on parts and testing equipment for maintenance, repair and overhauling of aircraft is being extended to parts and testing equipment for maintenance repair & overhauling of aircraft and aircraft parts. S. No.448 of notification No.12/2012-Customs, as amended by notification No. 12/2013-Customs, dated the 1st March 2013 refers.
88.4 Private category aircrafts are being included in the list of eligible categories of aircrafts for the purpose of availing of the exemption under notification No 12/2012- Customs. S. No.448 of notification No.12/2012-Customs, as amended by notification No. 12/2013-Customs, dated the 1st March 2013 refers.
88.5 The terms “scheduled air transport service” and “scheduled air cargo service” are explained in condition No. 75 of notification No. 12/2012-Cus dated 17.3.2012. In this connection, a doubt has been raised whether exemption granted to parts and testing equipment imported for servicing, repair or maintenance of scheduled airlines includes foreign airlines or otherwise. Under S. Nos. 448 and 454 of the notification No. 12/2012-Customs read with condition Nos. 73 and 21 respectively, exemption has been provided for servicing, repair or maintenance of aircraft used for operating “scheduled air transport service” and “scheduled air cargo service”. The term “scheduled air transport service”/ “scheduled air cargo service”, as defined under condition No 75 of the afore-said notification, does not exclude foreign airlines. It is as such clarified that the aforesaid exemption available for “scheduled air transport service” and “scheduled air cargo service” includes foreign airlines that meet the definition of scheduled air transport and air cargo service.
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88.6 Under S. No. 450 of the notification No. 12/2012-Customs read with condition 75 (ii), a foreign registered aircraft, that is brought into India for the purpose of “a flight to or across India” and which is intended to be removed within the time period specified for the purpose, is exempt from customs duty. In this connection, doubts have been raised whether the term “a flight to India” means “one landing and one take off” or it entitles the aircraft to fly to different destinations within India during the stipulated period of stay in India. The matter has been examined and it is clarified that the term “a flight to India” by a foreign registered non-scheduled aircraft shall mean a flight which after completion of its itinerary (which may include multiple destinations in India) leaves India within the stipulated period of 15 days, or as extended by the competent authority in the Ministry of Civil Aviation, not exceeding 60 days from the date of entry.
Chapter 89
89.1 By virtue of excise duty exemption on ships and vessels (89.01, 89. 04, 89.05 and 89.06 90 00), there will no CVD leviable on these ships and vessels. Notification Nos. 19/2012-Customs and 20-2012-Customs, both dated 17th March 2012 and S. No 462 of notification No. 12/2012-Customs, which have become redundant due to excise duty exemption, are being rescinded.
89.2 Basic customs duty on yachts and other vessels (89.03) is being increased from 10% to 25%. Clause 76 of the finance Bill, 2013 refers. By virtue of the Provisional Collection of Taxes Act, 1931, the levy will come into force with immediate effect.
89.3 The time limit for consumption of imported goods for the purpose of repair of ocean going vessels by ship repair units is being increased from 3 months to 1 year. S. Nos.459 and 460 of notification No.12/2012-Customs (Conditions 79 and 80), as amended by notification No. 12/2013-Customs, dated the 1st March 2013 refers.
Chapter 90-98: No change.
Miscellaneous:
(i) Full exemption is being provided to trophy when imported into India by National Sports Federation recognized by the Central Government or any Sports Body registered under any law for the time being in force in connection with international tournament to be held in India. Notification No. 146/1994-Customs, dated the 13th July, 1994 as amended by notification No. 14/2013-Customs, dated the 1st March 2013 refers.
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(ii) Notification No 75/2005-Customs, dated 22nd July 2005 (India- Singapore FTA) is being amended to replace the sub-heading 2920 90 90 with the sub-heading 2920 90 99. This is a technical rectification.
(iii) Exemption from education cess and secondary & higher education cess is being withdrawn on soya bean oil, olive oil and a few other items. Accordingly, S. Nos. 5, 6, 7, 8, 13, 51& 52 and entries relating thereto are being deleted from notification No 69/2004-Customs, dated 9th July 2004. In the said notification, at various places, references have been made to exemptions contained in erstwhile notification No. 21/2002-Customs, dated 1st March, 2002. The entries showing notification No. 21/2002-Customs (S. Nos. 9, 10, 12, 55) are being replaced by the relevant S. Nos. of notification No.12/2012 –Customs. This is a technical rectification. Notification No.69/2004-Customs as amended by notification No. 9/2013 –Customs, dated 1st March, 2013 may be referred to for details.
Baggage Rules
Presently, under Rule 6 of the Baggage Rules, 1998, an Indian passenger, who has been residing abroad for over one year, is permitted to bring jewellery without payment of duty up to an aggregate value of Rs 10,000/- in case of a gentleman passenger and Rs 20,000/- in case of a lady passenger. Under Rule 8 of the Baggage Rules,1998, a person who is transferring his residence ( Transfer of Residence) to India is also allowed to bring jewellery without payment of duty up to an aggregate value of Rs 10,000/- in case of a gentleman passenger and Rs 20,000/- in case of a lady passenger. The duty free limits are being raised to Rs 50,000/- in case of a gentleman passenger and Rs 100,000/- in case of a lady passenger.
Presently, under Rule 10 of the Baggage Rules, 1998, a crew member of the vessel/aircraft is allowed to bring duty free items like chocolates, cheese, cosmetics etc. for their personal or family use up to a value of Rs 600. The duty free allowance is being increased from Rs 600 to Rs 1500.
Notification No 25/2013-Customs (NT), dated 1st March, 2013 which contains these changes may be referred to for details.
*****

Incentives to semiconductor wafer fab manufacturing facilities

Incentives to semiconductor wafer fab manufacturing facilities, including zero
customs duty for plant and machinery.

Key Features of Budget 2013

“Kalangathu Kanda Vinaikkan Thulangkathu
Thookkang Kadinthu Seyal”
(What clearly eye discerns as right, with steadfast will
And mind unslumbering, that should man fulfil)
- Saint Tiruvalluvar
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Key Features of Budget 2013-2014
THE ECONOMY AND THE CHALLENGES
􀂉 Getting back to potential growth rate of 8 percent is the challenge facing the
country.
􀂉 Slowdown in Indian economy has to be seen in the context of slowing global
economic growth from 3.9 per cent in 2011 to 3.2 per cent in 2012.
􀂉 However, no reason for gloom or pessimism. Of the large countries of the world
only China and Indonesia growing faster than India in 2012-13. In 2013-14, only
China projected to grow faster than India.
􀂉 Between 2004 and 2008, and again in 2009-10 and 2010-11 the growth rate was
over 8 per cent and crossed 9 per cent in four of those six years.
􀂉 11th Plan period had average growth rate of 8 percent, highest during any Plan
period, entirely under the UPA Government.
􀂉 High growth rate can again be achieved through cooperation.
􀂉 ‘Higher growth leading to inclusive and sustainable development’ to be the
mool mantra.
􀂉 Government believes in inclusive development with emphasis on improving
human development indicators specially of women, the scheduled castes, the
scheduled tribes, the minorities and some backward classes. This Budget to be a
testimony to that commitment.
Fiscal Deficit, Current Account Deficit and Inflation
􀂉 The purpose of Budget to create economic space and find resources to achieve
the objective of inclusive development.
􀂉 Dr Vijay Kelkar Committee made its recommendations to Government
in September 2012. A new fiscal consolidation path with fiscal deficit at
5.3 per cent of GDP this year and 4.8 per cent of GDP in 2013-14 announced by
the Government.
􀂉 Foreign investment in an imperative in view of the high current account deficit
(CAD). FII, FDI and ECB three main source of CAD Financing. Foreign
investment that is consistant with our economic objectives to be encouraged.
􀂉 Development must be economically and ecologically sustainable and
democratically legitimate.
􀂉 Battle against inflation must be fought on all fronts. Efforts in the past few months
have brought down headline WPI inflation to about 7 per cent and core inflation
to about 4.2 percent.
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􀂉 Food inflation is worrying but all possible steps to be taken to augment the supply
side to meet the growing demand for food items.
􀂉 Government expenditure has both good and bad consequences and trick is to
find the correct level of Government expenditure.
􀂉 Faced with huge fiscal deficit, Government expenditure rationalised in 2012-13.
Some economic space retrieved. Space to be used to further Government’s socioeconomic
objectives.
THE PLAN AND BUDGETARY ALLOCATIONS
􀂉 Revised Estimates (RE) of the expenditure in 2012-13 at 96 per cent of the Budget
Estimates (BE) due to slowdown and austerity measures.
􀂉 During 2013-14, BE of total expenditure of ` 16,65,297 crore and of Plan
Expenditure at ` 5,55,322 crore.
􀂉 Plan Expenditure in 2013-14 to grow at 29.4 per cent over Revised Estimates for
the current year.
􀂉 All flagship programmes fully and adequately funded and sufficient funds
provided to each Ministry or Department consistent with their capacity to spend
funds.
􀂉 Budget for 2013-14 to have one overarching goal of creating opportunities for
our youth to acquire education and skills that will get them decent jobs or selfemployment.
SC, ST, Women and Children
􀂉 Allocations for Scheduled Caste Sub Plan and Tribal Sub Plan increased
substantially over the allocations of the current year. Funds allocated to these
Sub Plans cannot be diverted.
􀂉 ` 97,134 crore allocated for programmes relating to women and ` 77,236 crore
allocated for programmes relating to children.
􀂉 Ministry of Women and Child Development to design schemes that will address
the concerns of women belonging to the most vulnerable groups, including single
women and widows. An additional sum of ` 200 crore proposed to be provided
to the Ministry to begin work.
Minorities
􀂉 An increase of 12 per cent over the BE and 60 per cent over the RE of 2012-13 to
Ministry of Minority Affairs.
􀂉 Allocation of ` 160 crore to the corpus of Maulana Azad Education Foundation
to raise its corpus to ` 1,500 crore during 12th Plan period.
Disabled Persons
􀂉 A sum of ` 110 crore to the Department of Disablity Affairs for ADIP scheme in
2013-14 against RE 2012-13 of ` 75 crore.
􀂁
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Health and Education
􀂉 Health for all and education to all remains priority.
􀂉 ` 37,330 crore allocated to the Ministry of Health & Family Welfare.
􀂉 New National Health Mission will get an allocation of ` 21,239 crore.
􀂉 ` 4,727 crore for medical education, training and research.
􀂉 ` 150 crore provided for National Programme for the Health Care of Elderly.
􀂉 Ayurveda, Unani, Siddha and Homoeopathy are being mainstreamed. Allocation
of ` 1,069 crore to Department of AYUSH.
􀂉 ` 1,650 crore allocated for six AIIMS-like institutions.
􀂉 Allocation of ` 65,867 crore to the Ministry of Human Resource Development,
an increase of 17 perent over the RE of the current year.
􀂉 ` 27,258 crore provided for Sarva Shiksha Abhiyaan (SSA).
􀂉 An increase of 25.6 per cent over RE of the current year for investments in
Rashtriya Madhyamik Shiksha Abhiyan (RMSA).
􀂉 ` 5,284 crore allocated to Ministries/Departments in 2013-14 for scholarships to
students belonging to SC, ST, OBC, Minorities and girl children.
􀂉 Mid Day Meal Scheme (MDM) to be provided ` 13,215 crore.
􀂉 Government committed to the creation of Nalanda University as a centre of
educational excellence.
ICDS
􀂉 ` 17,700 crore allocated for ICDS in 2013-14 representing an increase of
11.7 per cent over 2012-13.
􀂉 Allocation of ` 300 crore in 2013-14 for a multi-sectoral programme aimed at
overcoming maternal and child malnutrition. Programme to be implemented in
100 districts during 2013-14 to be scaled to cover 200 districts the year after.
Drinking Water
􀂉 ` 15,260 crore allocated to Ministry of Drinking Water and Sanitation.
􀂉 ` 1,400 crore provided for setting-up of water purification plants in 2000 arsenic
- and 12000 fluoride-affected rural habitations.
Rural Development
􀂉 Allocation of ` 80,194 crore in 2013-14 for Ministry of Rural Development
marking an increase of 46% over RE 2012-13.
􀂉 Proposal to carve out PMGSY-II and allocate a portion of the funds to the new
programme that will benefit States such as Andhra Pradesh, Haryana, Karnataka,
Maharashtra, Punjab and Rajasthan.
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JNNURM
􀂉 ` 14,873 crore for JNNURM in BE 13-14 as against RE of ` 7,383 crore. Out of
this, a significant portion will be used to support the purchase of upto 10,000
buses, especially by the hill States.
AGRICULTURE
􀂉 Average annual growth rate of agriculture and allied sector was 3.6% during XI
Plan against 2.5% and 2.4% in IX and X plans respectively.
􀂉 In 2012-13, total food-grain production will be over 250 million tonnes. Minimum
support price for every agricultural produce has increased significantly under the
UPA Government.
􀂉 ` 27,049 crore allocated to Ministry of Agriculture, an increase of 22 per cent
over the RE of current year.
􀂉 Agricultural research provided ` 3,415 crore.
Agricultural Credit
􀂉 For 2013-14, target of agricultural credit kept at ` 7 lakh crore.
􀂉 Interest subvention scheme for short-term crop loans to be continued scheme
extended for crop loans borrowed from private sector scheduled commercial
banks.
Green Revolution
􀂉 Bringing green revolution to eastern India a remarkable success. ` 1,000 crore
allocated in 2013-14.
􀂉 ` 500 crore allocated to start a programme of crop diversification that would
promote technological innovation and encourage farmers to choose crop
alternatives.
􀂉 Rashtriya Krishi Vikas Yojana and National Food Security Mission provided
` 9,954 crore and ` 2,250 crore respectively.
􀂉 Allocation for integrated watershed programme increased from ` 3,050 crore in
2012-13 (BE) to ` 5,387 crore.
􀂉 Allocation made for pilots programme on Nutri-Farms for introducing new crop
varieties that are rich in micro-nutrients.
􀂉 National Institute of Biotic Stress Management for addressing plant protection
issues will be established at Raipur, Chhattisgarh.
􀂉 The Indian Institute of Agricultural Bio-technology will be established at Ranchi,
Jharkhand.
􀂉 Pilot scheme to replant and rejuvenate coconut gardens implemented in some
districts of Kerala and the Andaman & Nicobar extended to entire State of Kerala.
Farmer Producer Organizations
􀂉 Matching equity grants to registered Farmer Producer Organization (FPO) upto
a maximum of ` 10 lakhs per FPO to enable them to leverage working capital
from financial institutons.
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􀂉 Credit Guarantee Fund to be created in the Small Farmers’Agri Business
Corporation with an initial corpus of ` 100 crore.
National Livestock Mission
􀂉 National Livestock Mission to be set up.
􀂉 A provision of ` 307 crore made for the Mission.
Food Security
􀂉 Additional provision of Rs. 10,000 crore for National Food Security Act.
INVESTMENT, INFRASTRUCTURE AND INDUSTRY
􀂉 Communication with investors to be improved to remove any apprehension or
distrust, including fears about undue regulatory burden.
􀂉 Need of new and innovative instruments to mobilise funds for investment in
infrastructure sector. Measures such as:
* Infrastructure Debt Funds (IDF) to be encourged,
* IIFCL to offer credit enhancement.
* Infrastructure tax-free bond of ` 50,000 crore in 2013-14,
* Build roads in North eastern states and connect them to Myanmar with
assistance from WB & ADB,
* Raising corpus of Rural Infrastructure Development Fund (RIDF) to ` 20,000
crore and
* ` 5,000 crore to NABARD to finance construction for warehousing. Window
to Panchayats to finance construction of godowns.
Road Construction
􀂉 A regulatory authority for road sector.
􀂉 3000 kms of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan
and Uttar Pradesh will be awarded in the first six months of 2013-14.
Cabinet Committee on Investment
􀂉 The Cabinet Committee on Investment (CCI) has been set up. Decisions have
been taken in respect of a number of gas, power and coal projects.
New Investment
􀂉 Companies investing ` 100 crore or more in plant and machinery during the
period 1.4.2013 to 31.3.2015 will be entitled to deduct an investment allowance
of 15 per cent of the investment.
􀂉 Incentives to semiconductor wafer fab manufacturing facilities, including zero
customs duty for plant and machinery.
􀀤
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Savings
􀂉 Need to incentivise greater savings by household sector in financial instrumnets.
Following measures proposed:
􀂙 Rajiv Gandhi Equity Savings Scheme to be liberalised.
􀂙 Additional deduction of interest upto ` 1 lakh for a person taking first
home loan upto ` 25 lakh during period 1.4.2013 to 31.3.2014
􀂙 In consultation with RBI, instruments protecting savings from inflation
to be introduced.
Industrial Corridors
􀂉 Plans for seven new cities have been finalised and work on two new smart
industrial cities at Dholera, Gujarat and Shendra Bidkin, Maharashtra will start
duing 2013-14
􀂉 Delhi Mumbai Industrial Corridor (DMIC) to be provided additional funds during
2013-14 within the share of the Government of India in the overall outlay, if
required.
􀂉 Chennai Bengaluru Industrial Corridor to be developed.
􀂉 Preparatory work has started for Bengaluru Mumbai Industrial Corridor.
Leh-Kargil Transmission Line
􀂉 Government to construct a transmission system from Srinagar to Leh at a cost of
` 1,840 crore.
Ports
􀂉 Two new major ports will be established in Sagar, West Bengal and in Andhra
Pradesh to add 100 million tonnes of capacity.
􀂉 A new outer harbour to be developed in the VOC port at Thoothukkudi,
Tamil Nadu through PPP at an estimated cost of ` 7,500 crore.
National Waterways
􀂉 A bill to declare the Lakhipur-Bhanga stretch of river Barak in Assam as the
sixth national waterway to be moved in Parliament.
􀂉 Preparatory work underway to build a grid connecting waterways, roads and ports.
Oil and Gas
􀂉 A policy to encourage exploration and production of shale gas will be announced.
􀂉 The 5 MMTPA LNG terminal in Dabhol, Maharashtra will be fully operational
in 2013-14.
Coal
􀂉 In the medium to long term need to reduce our dependence on imported coal.
One way forward is to devise a PPP policy framework with Coal India Limited
as one of the partners.
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􀂉 Ministry of Coal to announce Government’s policies in due course.
Power
􀂉 Guidelines regarding financial restructuring of DISCOMS have been announced.
State Government urged to prepare the financial restructuring plan, quickly sign
MoU and take advantage of the scheme.
Micro, Small and Medium Enterprises
􀂉 Benefits or preferences enjoyed by MSME to continue upto three years after they
grow out of this category.
􀂉 Refinancing capacity of SIDBI raised to ` 10,000 crore.
􀂉 Another sum of ` 100 crore provided to India Microfinance Equity Fund.
􀂉 A corpus of ` 500 crore to SIDBI to set up a Credit Guarantee Fund for factoring.
􀂉 A sum of ` 2,200 crore during the 12th Plan period to set up 15 additional Tool
Rooms and Technology Development Centres with World Bank assistance.
􀂉 Ministry of Corporate Affairs to notify that funds provided to technology
incubators located within academic Institutions and approved by the Ministry of
Science and Technology or Ministry of MSME will qualify as CSR expenditure.
Textiles
􀂉 Technology Upgradation Fund Scheme (TUFS) to continue in 12th Plan with an
investment target of ` 1,51,000 crore.
􀂉 Allocation of ` 50 crore to Ministry of Textile to incentivise setting up Apparel
Parks within the SITPs to house apparel manufacturing units.
􀂉 A new scheme called the Integrated Processing Development Scheme will be
implemented in the 12th Plan to address the environmental concerns of the textile
industry.
􀂉 Working capital and term loans at a concessional interest of 6 per cent to handloom
sector.
􀂉 Scheme of Fund for Regeneration of Traditional Industries (SFURTI) extended
to 800 clusters during the 12th Plan.
Foreign Trade
􀂉 Support to measures to be taken to boost exports of goods and services.
FINANCIAL SECTOR
􀂉 A standing Council of Experts to be constituted in the Ministry of Finance to
analyse the international competitiveness of the Indian financial sector.
Banking
􀂉 Compliance of public sector banks with Basel III regulations to be ensured.
` 14,000 crore provided in BE 2013-14 for infusing capital.
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􀂉 All branches of public sector banks to have ATM by 31.3.2014.
􀂉 Proposal to set up India’s first Women’s Bank as a public sector bank. Provision
of ` 1,000 crore as initial capital.
􀂉 ` 6,000 crore to Rural Housing Fund in 2013-14.
􀂉 National Housing Bank to set up Urban Housing Fund. ` 2,000 crore to be
provided to the fund in 2013-14.
Insurance
􀂉 A multi-pronged approach to increase the penetration of insurance, both life and
general, in the country.
􀂉 Number of proposals finalised, in consultation with IRDA such as empowering
insurance companies to open branches in Tier-II cities and below without prior
approval of IRDA, KYC of banks to be sufficient to acquire insurance policies,
banks to be permitted to act as insurance brokers, banking correspondent allowed
to sell micro-insurance products and achieving the goal of having an office of
LIC and an office of at least one public sector general insurance company in
towns with population of 10,000 or more.
􀂉 Rashtriya Swasthya Bima Yojana to be extended to other categories such as
rickshaw, auto-rickshaw and taxi drivers, sanitation workers, rag pickers and
mine workers.
􀂉 A comprehensive social security package to be evolved for unorganised sector
by facilitating convergence among different schemes.
Capital Market
􀂉 Proposal to amend the SEBI Act, to strengthen the regulator, under consideration.
􀂉 Number of proposal finalised in consultation with SEBI.
􀂙 Designatged depository participants, authorised by SEBI, may register
different classes of portfolio investors, subject to compliance with KYC
guidelines.
􀂙 SEBI will simplify the procedures and prescribe uniform registration and
other norms for entry for foreign portfolio investors.
􀂙 Rule that, where an investor has a stake of 10 per cent or less in a company,
it will be treated as FII and, where an investor has a stake of more than
10 per cent, it will be treated as FDI will be laid.
􀂙 FIIs will be permitted to participate in the exchange traded currency
derivative segment to the extent of their Indian rupee exposure in India.
􀂙 FIIs will also be permitted to use their investment in corporate bonds and
Government securities as collateral to meet their margin requirements.
􀂙 SEBI to prescribed requirement for angel investor pools by which they
can be recognised as Category I AIF venture capital funds.
􀁱
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􀂙 Small and medium enterprises, to be permitted to list on the SME exchange
without being required to make an initial public offer (IPO).
􀂙 Stock exchanges to be allowed to introduce a dedicated debt segment on
the exchange.
ENVIRONMENT
􀂉 Support to municipalities that will implement waste-to-energy projects.
􀂉 Government to provide low interest bearing fund from the National Clean Energy
Fund (NCEF) to IREDA to on-lend to viable renewable energy projects.
􀂉 ‘Generation-based incentive’ reintroduced for wind energy projects and ` 800
crore allocated for this purpose.
OTHER PROPOSALS
Backward Regions Grant Fund
􀂉 New criteria for determining backwardness to be evolved and reflect them in
future planning and devolution of funds.
Skill Development
􀂉 Target of skilling 50 million people in the 12th Plan period, including 9 million
in 2013-14.
Defence
􀂉 Allocation for Defence increased to ` 2,03,672 crore including ` 86,741 crore
for capital expenditure.
􀂉 Constraints not to come in the way of providing any addition requirement for the
security of nation.
Science and Technology
􀂉 Despite constraints substantial enhancements given to Science and Technology,
Space and Atomic Energy.
􀂉 ` 200 crore to be set apart to fund organisations that will scale up S&T innovations
and make these products available to the people.
Institutions of Excellence
􀂉 A grant of ` 100 crore each made to 4 institution of excellence.
Sports
􀂉 National Institute of Sports Coaching to be set up at Patiala at a cost of
` 250 crore over a period of three years.
Broadcasting
􀂉 All cities having a population of more than 1,00,000 will be covered by private
FM radio services.
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Panchayati Raj
􀂉 Augmentation in the Budget allocation of Rajiv Gandhi Panchayat Sashaktikaran
Abhiyan (RGPSA) to ` 455 crore in 2013-14. An additional ` 200 crore proposed
to be provided.
Post Offices
􀂉 An ambitious IT driven project to modernise the postal network at a cost of
Rs. 4,909 crore. Post offices to become part of the core banking solution and
offer real time banking services.
Ghadar Memorial
􀂉 Government to fund the conversion of the Ghadar Memorial in San Francisco
into a museum and library.
Central Schemes
􀂉 Centrally Sponsored Schemes (CSS) and Additional Central Assistance (ACA)
Schemes to be restructured into 70 schemes. Central fund for the schemes to be
given to the States as part of central plan assistance.
Three promises
􀂉 Promises made to woman, youth and poor.
􀂙 We stand in solidarity with our girl children and women. And we pledge
to do everything possible to empower them and to keep them safe and
secure. A fund - “Nirbhaya Fund” - to be setup with Government
contribution of ` 1,000 crore.
􀂙 Youth to be motivated to voluntarily join skill development programmes.
National Skill Development Corporation to set the curriculum and
standards for training in different skills. ` 1000 crore set apart for this
scheme.
􀂙 To the poor of India direct benefit transfer scheme will be rolled out
throughout the country during the term of the UPA Government with the
motive “Äapka paisa aapke haath”.
Budget Estimates
􀂉 Plan expenditure is placed at ` 5,55,322 crore.
􀂉 Non Plan Expenditure is estimated at ` 11,09,975 crore.
􀂉 Fiscal deficit for the current year contained at 5.2 per cent and for the year 2013-
14 at 4.8 per cent.
􀂉 Revenue deficit for the current year at 3.9 per cent and for the year 2013-14 at 3.3
per cent.
􀂉 By 2016-17 fiscal deficit to be brought down to 3 per cent, revenue deficit to 1.5
per cent and effective revenue deficit to zero per cent.
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PART B — TAX PROPOSALS
􀂉 Clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a
fair mechanism for dispute resolution and independent judiciary for greater
assurance is underlying theme of tax proposals.
􀂉 Tax Administration Reforms Commission to be set up.
􀂉 In short term need to reclaim peak of 11.9 per cent of tax GDP ratio achieved in
2007-08.
DIRECT TAXES
􀂉 Little room to give away tax revenues or raise tax rates in a constrained economy.
􀂉 No case to revise either the slabs or the rates of Personal Income Tax. Even a
moderate increase in the threshold exemption will put hundreds of thousands of
Tax Payers outside Tax Net.
􀂉 However, relief for Tax Payers in the first bracket of `2 lakhs to ` 5 lakhs. A tax
credit of ` 2000 to every person with total income upto `5 lakhs.
􀂉 Surcharge of 10 percent on persons (other than companies) whose taxable income
exceed ` 1 crore to augment revenues.
􀂉 Increase surcharge from 5 to 10 percent on domestic companies whose taxable
income exceed ` 10 crore.
􀂉 In case of foreign companies who pay a higher rate of corporate tax, surcharge to
increase from 2 to 5 percent, if the taxabale income exceeds ` 10 crore.
􀂉 In all other cases such as dividend distribution tax or tax on distributed income,
current surcharge increased from 5 to 10 percent.
􀂉 Additional surcharges to be in force for only one year.
􀂉 Education cess to continue at 3 percent.
􀂉 Permissible premium rate increased from 10 percent to 15 percent of the sum
assured by relaxing eligibility conditions of life insurance policies for persons
suffering from disability and certain ailments.
􀂉 Contributions made to schemes of Central and State Governments similar to
Central Government Health Scheme, eligible for section 80D of the Income tax
Act.
􀂉 Donations made to National Children Fund eligible for 100 percent deduction.
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􀂉 Investment allowance at the rate of 15 percent to manufacturing companies that
invest more than ` 100 crore in plant and machinery during the period 1.4.2013
to 31.3.2015.
􀂉 ‘Eligible date’ for projects in the power sector to avail benefit under Section 80-
IA extended from 31.3.2013 to 31.3.2014.
􀂉 Concessional rate of tax of 15 percent on dividend received by an Indian company
from its foreign subsidiary proposed to continue for one more year.
􀂉 Securitisation Trust to be exempted from Income Tax. Tax to be levied at specified
rates only at the time of distribution of income for companies, individual or HUF
etc. No further tax on income received by investors from the Trust.
􀂉 Investor Protection Fund of depositories exempt from Income-tax in some cases.
􀂉 Parity in taxation between IDF-Mutual Fund and IDF-NBFC.
􀂉 A Category I AIF set up as Venture capital fund allowed pass through status
under Income-tax Act.
􀂉 TDS at the rate of 1 percent on the value of the transfer of immovable properties
where consideration exceeds ` 50 lakhs. Agricultural land to be exempted.
􀂉 A final withholding tax at the rate of 20 percent on profits distributed by unlisted
companies to shareholders through buyback of shares.
􀂉 Proposal to increase the rate of tax on payments by way of royalty and fees for
technical services to non-residents from 10 percent to 25 percent.
􀂉 Reductions made in rates of Securities Transaction Tax in respect of certain
transaction.
􀂉 Proposal to introduce Commodity Transaction Tax (CTT) in a limited way.
Agricultural commodities will be exempted.
􀂉 Modified provisions of GAAR will come into effect from 1.4.2016.
􀂉 Rules on Safe Harbour will be issued after examing the reports of the Rangachary
Committee appointed to look into tax matters relating to Development Centres
& IT Sector and Safe Harbour rules for a number of sectors.
􀂉 Fifth large tax payer unit to open at Kolkata shortly.
􀂉 A number of administrative measures such as extension of refund banker system
to refund more than ` 50,000, technology based processing, extension of
e-payment through more banks and expansion in the scope of annual information
returns by Income-tax Department.
13
Indirect Taxes
􀂉 No change in the normal rates of 12 percent for excise duty and service tax.
􀂉 No change in the peak rate of basic customs duty of 10 perent for non-agricultural
products.
Customs
􀂉 Period of concession available for specified part of electric and hybrid vehicles
extended upto 31 March 2015.
􀂉 Duty on specified machinery for manufacture of leather and leather goods
including footwear reduced from 7.5 to 5 percent.
􀂉 Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 perent.
􀂉 Export duty on de-oiled rice bran oil cake withdrawn.
􀂉 Duty of 10 percent on export of unprocessed ilmenite and 5 percent on export on
ungraded ilmenite.
􀂉 Concessions to air craft maintenaince, repair and overhaul (MRO) industry.
􀂉 Duty on Set Top Boxes increased from 5 to10 percent.
􀂉 Duty on raw silk increased from 5 to 15 percent.
􀂉 Duties on Steam Coal and Bituminous Coal equalised and 2 percent custom duty
and 2 percent CVD levied on both kinds coal.
􀂉 Duty on imported luxury goods such as high end motor vehicles, motor cycles,
yachts and similar vessels increased.
􀂉 Duty free gold limit increased to ` 50,000 in case of male passenger and `1,00,000
in case of a female passenger subject to conditions.
Excise duty
􀂉 Relief to readymade garment industry. In case of cotton, zero excise duty at fibre
stage also. In case of spun yarn made of man made fibre, duty of 12 percent at the
fibre stage.
􀂉 Handmade carpets and textile floor coverings of coir and jute totally exempted
from excise duty.
􀂉 To provide relief to ship building industry, ships and vessels exempted from
excise duty. No CVD on imported ships and vessels.
􀂉 Specific excise duty on cigarettes increased by about 18 percent. Similar increase
on cigars, cheroots and cigarillos.
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􀂉 Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs
registered as taxies.
􀂉 Excise duty on marble increased from `30 per square meter to ` 60 per square
meter.
􀂉 Proposals to levy 4 percent excise duty on silver manufactured from smelting
zinc or lead.
􀂉 Duty on mobile phones priced at more than `2000 raised to 6 percent.
􀂉 MRP based assessment in respect of branded medicaments of Ayurveda, Unani,
Siddha, Homeopathy and bio-chemic systems of medicine to reduce valuation
disputes.
Service Tax
􀂉 Maintain stability in tax regime.
􀂉 Vocational courses offered by institutes affiliated to the State Council of Vocational
Training and testing activities in relation to agricultural produce also included in
the negative list for service tax.
􀂉 Exemption of Service Tax on copyright on cinematography limited to films
exhibited in cinema halls.
􀂉 Proposals to levy Service Tax on all air conditioned restaurant.
􀂉 For homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of `1 crore
or more, which are high-end constructions, where the component of services is
greater, rate of abatement reduced from from 75 to 70 percent.
􀂉 Out of nearly 17 lakh registered assesses under Service Tax only 7 lakhs file
returns regularly. Need to motivate them to file returns and pay tax dues. A
onetime scheme called ‘Voluntary Compliance Encouragement Scheme’
proposed to be introduced. Defaulter may avail of the scheme on condition that
he files truthful declaration of Service Tax dues since 1st October 2007.
􀂉 Tax proposals on Direct Taxes side estimated to yield to `13,300 crore and on
the Indirect Tax side `4,700 crore.
Good and Services Tax
􀂉 A sum of ` 9,000 crore towards the first instalment of the balance of CST
compensation provided in the budget.
􀂉 Work on draft GST Constitutional amendment bill and GST law expected to be
taken forward.
  Source : http://indiabudget.nic.in/ub2013-14/bh/bh1.pdf

Big relief for service tax payers.

Voluntary compliance from 1/10/2007. No interest and  penalty.

Mobile phone valued costing more than Rs. 2000 will attract 6% custom duty on import

Mobile phone valued costing more than Rs. 2000 will attract 6% custom duty on import

There is no change in custom duty(at 1%) for mobile phone valued upto Rs 2000.

There is no change in custom duty(at 1%) for mobile phone valued upto Rs 2000. 

Duty free baggage allowance for jewelry import increased to Rs. 50,000 for men and 1,00,000 for women traveler

Duty free baggage  allowance for jewelry import  increased  to Rs. 50,000 for men and 1,00,000 for women traveler .



Explanatory Memorandum to notification No. 25/2013-Customs (N.T.) dated 01-03-2013.
Notification No. 25/2013-Customs (N.T.), dated 01-03-2013 seeks to further amend notification No. 30/98-Customs (N.T.), dated 2nd June, 1998, so as to raise the value limit of Jewellery allowed duty free to an Indian passengers who has been residing abroad for more than one year.

No change in normal rate of excise duty

No change in normal rate of excise duty

No change in service tax rate of duty

No change in service tax rate of duty

No change in Custom peak rate of duty

No change in Custom peak rate of duty

Live budget 2013 from Parliament

Live budget  2013 from Parliament

Pl watch Live budget (Budget directly from Govt  website)