JULY 06, 2009

FM ignores 'customs' of making major changes in import duty

By G P Sastry

MR Pranab Mukherjee’s maiden, Budget under the UPA Rule did not make major changes on the Customs front. The peak rate of Customs Duty remain at 10% and effective rates of 5% and 71/2 % for many commodities are continued.

One glaring change in the Tariff Structure on gold bars is increase from Rs.100/- per 10 grams, to, Rs.200 per 10 grams. In other forms of gold, other than bars, the rate is enhanced from, Rs.250/- per 10 grams to Rs.500/- per 10 grams. Similarly, the rate of duty on Silver in any form is enhanced to Rs.1000/- per kg. as against Rs.500/- per kg leviable now. These rates are also applicable to gold and silver ornaments otherthan those studded with stones and pearls imported as passenger baggage. Concessional rate of customs duty for plantation machinery at 5% BCD is extended upto 6-7-2010. Similarly customs duty on mechanical harvester for coffee plantation is reduced from 7.5 % to 5%., They are also exempt from CVD. THE, Duty, on permanent magnets for wind power generation is also reduced from 7.5% to 5%. Exemption from Customs Duty to specified raw materials/inputs for sports goods sector has been liberalized. Similar exemption is extended leather goods, Textile products on footwear Industry. Customs duty on unworked corals is fully exempt from duty.

Set top boxes were exempted till now will attract 5% Customs duty but duty on LCD Panels for manufacture of LCD Televisions is reduced from 10% to 5%. Parts for mobile phones will continue to enjoy exemption from payment of 4% special CVD upto 6.7.2010.

BCD on nine specified drugs, and bulk drugs and one vaccine are reduced from 10% to 5%.They will be eligible for CVD exemption also., Similar exemption for artificial heart and certain specified devices is reduced from 7.5 to 5% apart from continuing the existing CVD exemption.

Cotton waste and wool waste will attract 10% customs duty instead of 15%. Rock phosphate will attract 2% BCD as against 5% before., The Areal passenger ropeway projects will attract 5% BCD which was hitherto exempted., Exemption available to concrete batching plant with capacity of 50 CUM per hour or, more, used for road, construction., They will now, attract 7.5%, duty.
Water Sports equipments namely, inflatable rafts, snow skis, water skis, surf boards, sail boards are fully exempt from customs duty. Bio diesel will attract 2.5% BCD as against 7.5% earlier.

Adjustment of duties on packaged Software is done consequent on levy of service tax. Customs duty can be claimed as refund under New Section 26A if the goods are defective and, are not conforming to specifications in, the agreement.

The authority for Advance Rulings, constituted under Section 245-O of the Income tax Act is designated as the Authority for Customs, Central Excise and Service tax matters also. This change, will come into force from, a, date to, be, notified, later.

Now the High Courts are conferred with the powers to condone the delay in filing appeal etc, without limit on sufficient causes for such delay. The scope of compounding under section 137 is restricted by excluding certain varieties, offences.

These, are, the, highlights of the otherwise low, lighted, Budget, of the Finance Minister.