Mega Budget in December!
It was almost a Budget, with no Finance Bill, no Parliament and not even a Finance Minister. The CBEC issued several notifications yesterday, in tune with the PM's Economic Package.
Service Tax - one more service added for export benefit:
Exemption to Taxable services used for export of goods through the refund mode - clearing and forwarding agent - added to list of eligible services: Now Service Tax paid on clearing and forwarding agent in relation to export goods exported by the exporter, is also eligible for the exemption through the refund route. This is added as item No. 19 to the list in Notification No. , dated the 6th October, 2007.
This is subject to the condition that the exporter shall produce,-
(i) invoice issued by clearing and forwarding agent for providing services specified in column (3) specifying:
(a) number and date of shipping bill,
(b) description of export goods,
(c) number and date of the invoice issued by the exporter relating to export goods,
(d) details of all the charges, whether or not reimbursable, collected by the clearing and forwarding agent from the exporter in relation to export goods.
(ii) details of other taxable services provided by the said clearing and forwarding agent and received by the exporter, whether or not relatable to export goods.
The declaration that "the said goods shall be exported without availing drawback of service tax paid on the specified services under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995;" is no more required.
Notification NO. Dated: 7th December, 2008
Central Excise: Tobacco also gets relief
1. Goods manufactured in EOUs - exemption - Notification No. 23/2003 amended: The 8% duty related to textile articles is reduced to 4% and the 4% duty is reduced to nil in Sl Nos 5, 5A, 6, 7 and 7A of the table to the Notification. The notification had an explanation - The value of the goods shall be determined in terms of section 4 of the Central Excise Act". This is retained. Now when the duty is NIL, what is the need for determining the value under Section 4? This is another case of callous "copy and paste" technology.
2. Textiles - 8% reduced to 4% and 4% reduced to NIL. Notification No. 29/2004 amended.
3. Intraocular lenses: Intraocular lenses falling under heading 9001 will now be charged to 4% excise duty instead of 8%. - Notification No. 3/2005 amended.
4. Excise Duty reduced from 14% to 10% and 8% to 4% for items covered under Notification No. 3/2006: But the notification 3/06 also contains entries relating to tobacco products at Sl.No. 33, 35 and 40. Is it necessary to reduce duty on tobacco products also? Does the govt think that increase in tobacco consumption will boost the economy? Then what happens to Mr. Ambumani Ramdass's claims?
5. Excise Duty on Cement- Specific rate reduced: Notification No. 4/2006 amended: The rate of Rs. 220 is reduced to Rs. 145; Rs. 370 reduced to Rs. 250; Rs. 350 reduced to Rs. 230; Rs. 250 reduced to Rs. 170 and Rs. 400 reduced to Rs. 290.
6. 4% reduction to goods covered under Notification No. 6/2006.
7. 8% duty reduced to 4% for goods covered under Notification No. 10/2006.
8. 8% duty instead of 12% for software - Notification No. 49/2006 amended.
9.14% effective rate reduced to 10% for most goods - Notification No. 2/2008 amended.
Notification No. Dated: 7th December, 2008
Duty Rates of 24%, 12% and 8% reduced by 4%: wherever duty rates were 24%, 12% and 8%, they have been reduced to 20%, 8% and 4% respectively.
Now there may be certain goods which will attract nil rate of duty as well as 4% duty by two different notifications, but of course the assessee will have the choice.
Notification No. Dated: 7th December, 2008
Customs:
1. Naphtha for power projects exempted - no exemption for captive consumption: Naphtha imported for generation of electrical energy by electrical undertakings owned by Central and State Governments or State Electricity Boards or any local authority or a person licensed under part II of the Electricity Act, 1910 or who has obtained a sanction under section 28 of the said act or a generating company permitted under the Electricity (Supply) Act, 1948 to supply electrical energy or to engage in the business of supplying electrical energy, exempted from Customs duty, but the exemption shall not be available if such naphtha is used for generation of electrical energy for captive consumption. The exemption is valid till 31st march 2009.
2. CVD reduced to 10% in place of 14% for many items covered under Notification No. 21/2002
Notification No. No. Dated: 7th December, 2008
No Export duty on Iron Ore fines: Iron ore fines falling under Heading No. 11 of the Second Schedule to the Customs Tariff Act, exempted from export duty. Consequently the Notification No. 116/2008, dated the 31st October, 2008 prescribing effective rate of Rs. 200/- per tonne is withdrawn.
Notifications No. and No. Dated: 7th December
Iron ores and concentrates to attract 5% export duty: iron ores and concentrates falling under Heading No. 11 of the Second Schedule to the Customs Tariff Act will now attract 5% export duty instead of the present 15% - Notification No. 79/2008 amended.
Notification No. No. Dated: 7th December, 2008