CENTRAL EXCISE

By Vijay Kumar

NIL DUTY

1. Cotton yarn other than sewing thread not put up for retail sale was exempted from whole of excise duty under Notification No.3/2005. Now, cotton yarn (other than sewing thread) put up for retails sale is also exempted from payment of Central Excise duty.

2. Machine made Carpets and textile floor coverings under Chapter 57 were exempted. Now an explanation is added to specify that manually operated implements used independently by hand are not Machines.

3. Some more items like Gudaku Tobacco, raw furskin, Umbrella cloth panels and drawing instruments added to the list of NIL duty goods.

Notfn No.15/2005 dated 2-5-2005.

EXEMPTIONS

1. Exemption to tyres, flabs and tubes for certain machinery withdrawn.

2. Molasses to attract Rs.750/- per M.T. instead of Rs.1,000/- originally proposed in the Finance Bill.

3. Mono Filament Long Line System for Tuna Fishing wholly exempted from Excise duty. This would make the applicable CVD nil when these goods are imported. Customs Duty for this item has been reduced to 5%

4. Duty on isolated Soya Protein reduced from 16% to 8%

Notification No. dated 2-5-2005

TEXTILES

Tyre Chord Fabric of high tenacity yarn of nylon to attract an optional Excise duty of 16% instead of 8% now. This is an optional system for textiles under Notification No.29 & 30/2004 dated 9-7-2004 under which most of the textile items are exempted. But the manufacturers can choose to avail CENVAT credit and pay duty @ 4% for cotton and 8% for other textiles.

Notfn No.17/2005 dated 2-5-05

DOMESTIC LPG

LPG supplied to domestic consumers had been under exemption. Now this exemption is extended to Liquefied Propane and Butane mixture, Liquefied Propane and Liquefied Butane. All these are the different variants of what is commonly known as LPG. These have been exempted under Customs Duty also. Suitable Amendment has been made in the CENVAT credit Rules, 2004 to provide for proportionate reversal of credit when these exempted goods are cleared.

Notification No. dated 2-5-2005 and Notification No. dated 2-5-2005.

CUSTOMS

Liquefied Propane and Butane mixture, Liquefied Propane and Liquefied Butane for domestic supply, fully exempted and Mono Filament Long Line System for Tuna Fishing to attract 5% Customs duty.

Notification No. dated 2.5.2005.

Additional Duty on computers:- CPUs imported separately will attract a duty of 7% and computers with monitor, mouse and keyboard imported together as a set will attract 7% duty.

Notification No. dated 2.5.2005.

Parts of mobile handsets: Parts/components/accessories imported for manufacture of mobile handsets including cellular phones, has been exempted from the 4% CVD. This exemption will be available up to 30.4.2007. These are already exempted from the basic customs duty by notification No. 21/2005 dated 1.3.2005.

Notification No. dated 2.5.2005.

33% safeguard duty imposed on tapioca starch

Safeguard duty has been imposed on import of Tapioca starch at the following rates:-

(a) 33% ad valorem, when imported from the 2nd day of May, 2005 to 1st day of May, 2006 (both days inclusive);

(b) 23% ad valorem, when imported from the 2nd day of May, 2006 to 1st day of May, 2007 (both days inclusive); and

This will not apply to imports of Tapioca Starch from countries notified as developing countries other than Thailand and Vietnam.

Notification No. dated 2.5.2005