ANNEXURE

CHANGES IN INDIRECT TAXES

A - CUSTOMS

Note :

Basic Customs Duty means the customs duty levied under the Customs Act 1962. Ch.No. means Chapter Number of the Customs Tariff Schedule.

Major Proposals about customs duties are the following :

I

SPECIAL CUSTOMS DUTY ABOLISHED

·

Special Customs Duty is being abolished with effect from 28th February, 1999.

II

PEAK RATE OF CUSTOMS DUTY REDUCED

·

Peak rate of customs duty has been reduced from 45% (Basic + Special) to 40% (Basic)

III

CHANGES IN CUSTOMS DUTY RATE STRUCTURE :

·

To generally reduce the existing 7 major ad valorem rates of basic customs duty to 5 rates, namely, 5%, 15%, 25%, 35% and 40%.

Existing Rate (ad valorem)

Proposed Rate (ad valorem)

5%

5%

10%

15%

20%

25%

25%

25%

30%

35%

35%

35%

40%

40%

·

Present and proposed rates of basic customs duty on representative commodities are indicated below :

Ch.

Commodity

Present

Proposed

No.

(Basic + Spl. Customs)

Basic

4

Skimmed milk powder

0%

0%

4

Dairy products other than Milk Powder

35%

35%

7

Pulses

0%

0%

7

Vegetables (fresh and dried)

15%

15%

9

Coffee and tea

15%

15%

9

Spices

35%

35%

10

Cereals

0%

0%

12

Oilseeds (other than for planting)

45%

40%

13

Vegetable saps and extracts (other than opium, liquorice, hops

and pyrethrum)

15%

15%

13

Oleopine resin

15%

15%

15

Edible vegetable oils (not coconut)

15%

15%

15

Coconut oil

45%

40%

17

Refined sugar

20%

25%

18

Edible preparations for infants

15%

15%

18

Miscellaneous edible preparations (other than for infant use)

45%

40%

22

Beer, wine, vermouth

105%

100%

22

Whisky, rum, gin, vodka

245%

230%

24

Tobacco and manufactured tobacco substitutes

45%

40%

25

Non-metallic ores / minerals (Clay, limestone, etc.)

30%

25%

25

Dead Burnt Magnesite, Fused magnesia, etc.

45%

40%

26

Metallic ores

10%

5%

26

Copper concentrate

10%

5%

27

SKO (for PDS)

0%

0%

27

Naphtha

0%

5%

27

Kerosene consumed for manufacture of N-paraffin / LAB

0%

5%

27

Coking coal with ash content less than 12%

8%

5%

27

LNG

12%

5%

27

LPG

12%

10%

27

Coking coal with ash content above 12%

15%

15%

27

Coke

15%

15%

27

Non-coking coal

15%

15%

27

Crude petroleum

22%

20%

27

Motor Spirit

32%

30%

27

High Speed Diesel Oil

32%

30%

27

Aviation turbine fuel, Furnace Oil, Bitumen, wax, etc.

32%

30%

27

SKO for parallel marketing

32%

30%

27

Other petroleum products

32%

30%

28

Iodine

15%

15%

28

Inorganic chemicals (general rate)

35%

35%

28

Soda Ash

35%

35%

28

Caustic Soda

35%

35%

28

Titanium dioxide

45%

40%

29

Specified life-saving drugs and bulk drugs for their manufacture

0%

0%

29

Paraxylene

5%

5%

29

Building blocks/ Feed stocks (Ethylene, propylene, etc.)

15%

15%

29

DMT/PTA/MEG/ Caprolactum

30%

25%

29

Methanol/ Phenol

30%

25%

29

Organic chemicals (general rate)

35%

35%

29

Citric acid

45%

40%

31

NPK type fertliser

0%

0%

31

Urea, DAP etc when used as manure or for

manufacture of complex fertilisers

0%

5%

32

Dyes, paints, pigments, etc.

35%

35%

32

Titanium dioxide based pigments

45%

40%

33

Cosmetics and toilet preparations

45%

40%

34

Soaps, detergents

45%

40%

37

Photographic goods

30%

25%

38

Biopesticides

10%

5%

38

Linear alkyl benzene

25%

25%

38

Catalysts

30%

25%

38

Misc. chemical products

35%

35%

39

Bulk polymers LDPE / HDPE, PVC, PP, PS

35%

35%

39

Engineering plastics / Polymers

35%

35%

39

Articles of plastics

35%

35%

40

Natural rubber

25%

25%

40

Tyres (other than of aircraft)

45%

40%

40

Other rubber products

45%

40%

43

Raw furskins and tanned / dressed furskins

(other than of certain specified lambs)

15%

15%

44

Wood in the rough or roughly squared,

Fuel wood, wood charcoal

0%

5%

44

Fibreboard / particle board of wood or other ligneous material

45%

40%

47

Wood pulp

10%

5%

47

Waste paper (actual user import)

5%

5%

48

Glazed Newsprint

0%

5%

48

Standard newsprint/ lightweight coated paper

upto 70 gm/sqm for printing of magazines

5%

5%

48

Coated and uncoated printing and writing paper, paper board

35%

35%

48

Articles of Paper / Paper Board

(heading nos. 48.12 to 48.23, except 4823.20)

45%

40%

49

Printed books, periodicals, newspapers, journals, etc.

0%

0%

51

Raw wool (other than carpet grade)

20%

15%

51

Raw wool (carpet grade)

10%

5%

52

Specified variety of cotton yarn

30%

25%

52

Specified variety of Cotton fabrics

45%

40%

54

Specified filament yarns

35%

35%

55

Specified man made fibres

35%

35%

55

Fabrics of manmade fibres

40%

40%

56

Wadding, Felt, Non-wovens, etc.

40%

40%

59

Coated textile fabrics and Tyre cord fabrics

40%

40%

61

Readymade garments

45%

40%

64

Footwear

45%

40%

69

Refractory bricks, tiles, crucibles, etc.

30%

25%

69

Ceramic products

45%

40%

70

Glass and glassware

45%

40%

71

Gold

Rs.400 per 10 gm.

Rs.400 per 10 gm.

71

Silver

Rs.500 per kg

Rs.500 per kg

72

Steel melting scrap

10%

5%

72

Ferro-nickel (actual user import for manufacturing steel)

10%

5%

72

Rerollable scrap

25%

25%

72

Iron or non-alloy steel ingots, certain specified billets,

blooms, slabs ; ferro alloys (other than Ferro-nickel)

25%

25%

72

HR Coils of Stainless Steel or specified non-alloy steel

30%

25%

72

CR Coils

35%

35%

72

Bars and rods, wires, angles, shapes and sections

etc. of iron and steel

35%

35%

73

Articles of iron and steel

35%

35%

74

Unwrought copper / copper alloy

35%

35%

74

Copper waste and scrap

35%

35%

74

Wrought copper and articles of copper

40%

35%

75

Nickel and articles thereof

15%

15%

76

Aluminium waste and scrap

15%

15%

76

Unwrought Aluminium

25%

25%

76

Articles of Aluminium

25%

25%

78

Lead and articles thereof

35%

35%

79

Zinc & articles thereof

35%

35%

80

Tin and articles thereof

25%

25%

81

All other base metals and articles (other than unwrought magnesium)

35%

35%

81

Unwrought Magnesium

32%

25%

83

Misc. articles of base metals

45%

40%

84

Engines and parts of aeroplanes, gliders, etc.

3%

3%

84

Specified textile machinery and parts

15%

15%

84

Ball or roller bearings of 60mm bore or less; parts

15% + Rs.150/kg

15% + Rs.150/kg

84

Ball or roller bearings of more than 60mm bore; parts

15% + Rs.80/kg

15% + Rs.80/kg

84

Computers & floppy diskettes

22%

20%

84

General machinery and parts

25%

25%

84

IC engines and parts

35%

35%

84

Typewriters and other office machines

45%

40%

84

Consumer durables, Air conditioning appliances

45%

40%

85

Data display tubes, colour

5%

5%

85

Parts of resistors/ semi conductors

15%

10%

85

Specified inputs for optical fibres and cables

15%

15%

85

Parts of telecom equipment, pagers and cellulars.

25%

20%

85

DC micro motors

25%

25%

85

FRP Rods

25%

25%

85

Glass bulbs/ shells / parts for CPT

25%

25%

85

Glass parts for CPT (excluding neck or reneck tubes)

30%

25%

85

Optical fibres

30%

25%

85

Parts of capacitors

35%

15%

85

CD mechanism

35%

25%

85

Colour picture tubes

35%

35%

85

Electro-mechanical domestic appliances

45%

40%

85

Batteries

45%

40%

85

Lamps, wires & cables

45%

40%

86

Railway locomotives

45%

40%

87

Motor vehicles and parts

45%

40%

88

Satellites and payloads

0%

0%

88

Aeroplanes, gliders and helicopters

3%

3%

89

Vessels and other floating structures for breaking up

10%

5%

90

Specified medical equipment and parts/ spares thereof

15%

15%

90

Other medical equipment

25%

25%

90

Instruments and parts (general rate)

25%

25%

90

Photographic and cinematographic cameras, projectors

45%

40%

90

Image projectors, Specified photographic equipments

and photocopiers

45%

40%

91

Clocks, watches, etc.

45%

40%

92

Musical instruments

35%

35%

93

Arms and ammunitions

45%

40%

94

Furniture, bedding, etc.

45%

40%

95

Toys, games and sports requisites

30%

25%

96

Misc. manufactured goods

45%

40%

98

Captive power generation projects

22%

25%

98

Specified goods imported as baggage on transfer of

residence

30%

25%

98

Postal imports

45%

40%

98

Baggage imports, other than transfer of residence

- upto Rs.12000

0%

0%

98

Baggage imports, other than transfer of residence

- above Rs.12000

50%

55%

98

Transfer of residence baggage

30%

25%

IV

IMPOSITION OF SURCHARGE ON IMPORTS

·

A surcharge at the rate of 10% of basic duty has been imposed across the board. However, following are the exceptions :

¨    Gold and Silver
¨    Crude petroleum and petroleum products
¨    All 40% rated commodities
¨    Certain GATT bound items

·

The surcharge would come into force with effect from 28th February 1999.

·

The surcharge would apply upto 31st March, 2000.

V

CONTINUATION OF SPECIAL ADDITIONAL DUTY OF CUSTOMS

·

The Special Additional Duty will continue @ 4%.

VI

ADDITIONAL DUTY OF CUSTOMS ON HIGH SPEED DIESEL OIL

·

An additional customs duty of Re 1 per litre imposed on High Speed Diesel Oil.

·

This will come into force from 28th February, 1999.

VII

WITHDRAWAL OF EXEMPTION

·

A basic duty of 5% has been imposed on a number of commodities by withdrawing exemption or imposing a tariff.

·

Items on which basic customs duty is being imposed at 5% for the first time have been

exempted from Special Additional Duty of Customs.

VIII

DEEPER CONCESSIONS TO IT SECTOR

·

The basic customs duty on a number of items used in the IT sector has been reduced/ rationalised as follows :

• Telecom transmission apparatus, telephonic or telegraphic switching apparatus, reduced from 30% to 25%.
• All storage devices, rationalised at 5%. motherboards), rationalised at 5%.
• All IC's and micro-assemblies and microprocessors for computers (other than motherboards), rationalised at 5%.
• Parts of computers (other than PPCB's), reduced from 10% to 5%.
• CD-ROMs, reduced from 10% to 5%.
• Specified prepared media, reduced from 40% to 25%.
• Diodes, transistors, other semi-conductor devices and specified electronic components, reduced from 20% to 15%.
• Specified raw material and inputs for electronic industry, reduced from 10% to 5%.
• Additional inputs for semiconductor devices, ceramics dielectric (multilayer) capacitors, tantalum capacitors and other specified electronic components included for the concessional basic customs duty of 5%.
• Specified (75 no.) machinery for semi-conductor manufacture exempted from basic customs duty.

IX

IMPOSITION OF ADDITIONAL DUTY OF CUSTOMS (CVD)

·

Additional duty of Customs (CVD) has been imposed in a number of cases where it is exempted at present, including on specified items imported for the project imports. The rate structure for project imports will be as follows.

PRESENT

PROPOSED

RATE

RATE

Basic + Special

CVD

Basic

CVD

• Fertiliser Projects

0%

0%

5%

10%

• Power generation projects

22%

0%

5%

16%

• Power transmission projects (65 KV and above)

22%

10%

25%

16%

• Coal mining projects

22%

0%

5%

16%

• Specified equipment required for telecom projects

22%

0%

5%

16%

• Iron and steel products, machinery and equipment for renovation or modernisation of a power generation plant (excl. captive power plant)

25%

0%

5%

16%

• Specified equipment for setting up of new refineries

0%

10%

5%

10%

• General Industrial projects

22%

13%

25%

16%

X

POWER OF THE GOVERNMENT TO GRANT AD-HOC EXEMPTION

·

The power of the Government to grant ad-hoc exemption from customs duty by issue of special orders restricted to :

• Goods of strategic nature
• Goods of secret nature
• Goods for charitable purposes

XI

EXEMPTION TO ONGC / OIL

·

Specified capital goods / consumables imported by ONGC / OIL for petroleum operation has been exempted at par with imports under NELP lease agreement.

XII

STEEL IMPORTED BY CAPITAL GOODS MANUFACTURER

·

Basic customs duty on steel imported by manufacturer of certain types of capital goods reduced to 25%.

XIII

ADVANCE RULING AUTHORITY

·

Legal provisions made in the Finance Bill, 1999 for setting up of Advance Ruling Authority to pronounce ruling regarding classification and valuation in advance for the benefit of joint ventures with NRI's.

XIV

FEES FOR FILING REVISION APPLICATION

·

Fees for filing revision application raised from Rs.200 to Rs.1000 in those cases where the amount involved is more than Rs.1 lakh.

B - UNION EXCISE DUTIES

Note: Ch.No.means Chapter Number of the Central Excise Tariff Schedule.

Major proposals about Central Excise duties are the following:

I.

CHANGES IN AD VALOREM DUTY RATE STRUCTURE :

·

To reduce the existing 11 ad valorem rates of excise duty to three ad valorem rates, namely, 8%, 16% and 24%.

Existing Rate

Proposed Rate

(ad valorem)<>

(ad valorem)

5%

8%

8%

8%

10%

8%

12%

8%

13%

16%

15%

16%

18%

16%

25%

24%

30%

24%

32%

24%

40%

24%

·

Special excise duty has been imposed on the following items by amending section 3 of the Central Excise Act,1994.

Proposed

Proposed

Basic excise

Special excise

duty

duty

(ad valorem)

• Cosmetics and toilet preparations

24%

6%

• Polyester filament yarn

24%

6%

• Tyres & tubes for cars and buses, etc

24%

6%

• Air-conditioners and parts, etc.

24%

6%

• Multi-utility vehicles (For 7-12 persons)

24%

6%

• Motor Spirit

24%

8%

• Soft drinks (Aerated waters) and concentrates

24%

16%

• Motor cars

24%

16%

• Pan Masala

24%

16%

• Chewing tobacco and other tobacco products

24%

16%

·

Excise duty on cold chain equipment and parts reduced to 8%. This will come into force from 1st April, 1999.

·

Present and proposed rates of excise duty on representative commodities are indicated below :

Ch.

Commodities

Present

Proposed Rate

No.

Basic

Spl Ex.

4

Condensed milk

13%

16%

11

Malt

13%

16%

13

Gum,resins,vegetable saps, & extracts

8%

8%

15

Glycerol,waxes,linoxyn, soap stock

18%

16%

16

Preparation of meat, fish etc.(branded)

8%

8%

17

Sugar confectionery,sugar syrup

8%

8%

17

Chewing gum

18%

16%

18

Cocoa and cocoa preparations; Chocolates

18%

16%

19

Biscuits made with power

8%

8%

19

Cakes and pastry

8%

8%

19

Pasta Products, Cornflakes, etc.

13%

16%

19

Malt based food products

18%

16%

20

Preparation of vegetables fruits & nuts

(Jams, Jellies, Juices, etc.)

8%

8%

21

Soups, Sauces, instant food mixes, etc.

8%

8%

21

Roasted Chicory

8%

8%

21

Ice cream

13%

16%

21

Sharbat, Thandai, Miscellaneous edible preparations

18%

16%

21

Supari

15%

16%

21

Instant coffee

18%

16%

21

Yeasts, Baking Powder

13%

16%

21

Soft drink concentrate (For aerated waters)

40%

24%

16%

21

Pan Masala

40%

24%

16%

22

Fruit Pulp & Fruit based drinks

8%

8%

22

Mineral water

18%

16%

22

Denatured alcohol and vinegar

18%

16%

22

Aerated soft drinks

40%

24%

16%

24

Chewing tobacco & Misc. tobacco products

40%

24%

16%

25

White Cement

25%

24%

26

Ores, slag and ash

8%

8%

27

Kerosene

10%

8%

27

Furnace Oil - (Non Feed Stock use in fertilisers)

5%

8%

27

LPG

10%

8%

27

Naphtha - Non Fertiliser use

15%

16%

27

Aviation Turbine Fuel

15%

16%

27

High Speed Diesel Oil.

15%

16%

27

Light diesel oil

15%

16%

27

Furnace Oil - Non-Fertiliser use

15%

16%

27

LSHS - Non-Fertilser use

15%

16%

27

Bitumen, Wax, etc.

15%

16%

27

Benzol, Toluole, Xylole, Naphthalene, etc.

18%

16%

27

Motor Spirit

32%

24%

8%

28

Medicinal Grade Oxygen

8%

8%

28

Potassium Iodate

8%

8%

28

Copper Sulphate

8%

8%

28

Medicinal grade hydrogen peroxide

8%

8%

28

Anesthetics

8%

8%

28

Silicon in all forms

8%

8%

28

Acids

18%

16%

28

Caustic soda

18%

16%

28

Soda Ash

18%

16%

28

Inorganic chemicals

18%

16%

29

Organic Chemicals

18%

16%

30

Ayurvedic medicines (P & P)

8%

8%

30

Generic Allopathic medicines

8%

8%

30

Allopathic medicines (P & P) and other pharmaceutical

goods

15%

16%

32

Tanning extracts

8%

8%

32

Synthetic Organic Dyes

18%

16%

32

Paints and varnishes

18%

16%

32

Printing ink, students colour, etc.

18%

16%

33

Tooth powder, tooth paste

8%

8%

33

Perfumed Hair-oil

18%

16%

33

Sterile contact lens solution

25%

24%

33

Cosmetics

30%

24%

6%

34

Laundry soap

8%

8%

34

Toilet soap

18%

16%

34

Detergent powder and cakes

18%

16%

34

Lubricating preparations

15%

16%

34

Waxes, polishes etc.

18%

16%

35

Modified starches etc.

18%

16%

36

Fire works

13%

16%

36

Explosives

18%

16%

37

Cinematographic films

18%

16%

37

X-Ray Films

13%

16%

37

Photographic plates, films, paper and chemicals

18%

16%

38

Insecticides, pesticides, etc. (Formulations)

8%

8%

38

Industrial fatty acids, fatty alcohols

8%

8%

38

Misc chemical products

18%

16%

38

Phosphogypsum

13%

16%

39

Articles of Plastics (without modvat)

5%

8%

39

Cassette shell for audio cassettes

8%

8%

39

PVC compound

18%

16%

39

PVC corrugated roofing sheets

18%

16%

39

Strips of plastics intended for manufacture of fabrics or for

manufacture of sacks / bags, without modvat

13%

16%

39

Polyethylene coated paper or paperboard, other than certain

types

18%

16%

39

Cellophane

18%

16%

39

Engineering plastics (ABS, etc.)

18%

16%

39

Insulated ware (Casseroles, etc.)

15%

16%

39

Bulk polymers (PVC, LDPE, HDPE, PS, PP, etc.)

25%

24%

40

Surgical gloves and medical examination gloves of rubber

8%

8%

40

Tyres and tubes - for two wheelers and tractor rear

tyres and their tubes

13%

16%

40

Synthetic rubber

18%

16%

40

Tread rubber (for small units, upto clearances of Rs 150

lakhs)

15%

16%

40

Tread rubber, certain cellular rubber, conveyor or

transmission belts or beltings

25%

24%

40

Tyres - for buses, cars, etc.

30%

24%

6%

42

Articles of leather, travel goods

18%

16%

44

Particle board / fibre board

8%

8%

44

Plywood

18%

16%

45

Cork and articles of cork

18%

16%

47

Waste and scrap of paper /paper board

18%

16%

48

Paper & paperboard (manufactured from pulp containing

not less than 75% by weight of pulp made from materials

other than bamboo, hard woods, soft woods, reeds or rags,

upto 15000 M.T. clearances)

5%

8%

48

Paper & paper board (manufactured from pulp containing

not less than 75% by weight of pulp made from materials

other than bamboo, hard woods, soft woods, reeds or rags,

above 15000 M.T. clearances)

8%

8%

48

Sanitary towels

8%

8%

48

Paper cartons (other than of corrugated paper/ paper board)

13%

16%

48

Paper/board made of wood pulp

18%

16%

49

Transfers

18%

16%

51

Carded or combed wool

8%

8%

51

Yarn of wool

8%

8%

51

Shoddy yarn

8%

8%

51

Woollen Fabrics

15%

16%

52

Cotton Yarn not containing synthetic fibre

5%

8%

52

Cotton Fabrics value not exceeding Rs 30 per sqm (for those

not covered under the capacity based compounded levy

scheme)

5%

8%

52

Cotton Fabrics value exceeding Rs 30 per sqm (for those not

covered under the capacity based compounded levy scheme)

12%

8%

52

Cotton Yarn - blended with synthetic fibres

18%

16%

53

Flax and ramie yarn

5%

8%

53

Ramie fabrics

8%

8%

54

Nylon filament yarn

25%

24%

54

Polyester filament yarn

30%

24%

6%

54

Viscose filament yarn, Polypropylene filament yarn, etc.

18%

16%

55

Fabrics of man made fibres (for those not covered under

the capacity based compounded levy scheme)

12%

8%

55

Man-made staple fibre including tow (PSF, VSF, ASF, etc.)

18%

16%

55

Man-made spun yarn (Polyester/ Viscose/ Acrylic spun yarn)

18%

16%

55

Synthetic sewing thread

15%

16%

57

Carpets and textiles floor coverings

25%

24%

58

Laces

8%

8%

59

Tyre cord, laminated fabrics

18%

16%

63

Other made up textile articles (Blankets, Bed

linen, Bags & Sacks, etc.)

8%

8%

64

Footwear and parts

15%

16%

65

Headgear (Helmets)

13%

16%

68

Articles of asbestos- cement

18%

16%

68

Articles of stone, cement, plaster, etc.

18%

16%

69

Ceramic products, other than glazed tiles

15%

16%

69

Glazed tiles

25%

24%

70

Household glassware

8%

8%

70

Glassware, other than household glassware,

produced by mouth blown process

8%

8%

70

Glassware, other than household glassware,

produced by semi-automatic process

13%

16%

70

Glass and Glassware other than household

glassware, produced by automatic process

18%

16%

70

Glass Containers

18%

16%

72

Iron & Steel - Primary products

15%

16%

73

Pressure Cookers (of Iron & Steel)

8%

8%

73

Articles of Iron & Steel

15%

16%

74

Copper & articles thereof

15%

16%

75

Nickel & articles thereof

15%

16%

76

Pressure Cookers of Aluminium

8%

8%

76

Aluminium & articles thereof

15%

16%

78

Lead & articles thereof

15%

16%

79

Zinc & articles thereof

15%

16%

80

Tin & articles thereof

15%

16%

81

Other base metals, cermets and articles thereof

15%

16%

82

Tools, implements, razors and razor blade

15%

16%

83

Electrical stampings & laminations

18%

16%

83

Misc. base metal articles

15%

16%

83

Safes and strong boxes

18%

16%

84

Dairy & Milking machinery

8%

8%

84

I.C. engines

13%

16%

84

Parts of I.C. engines

13%

16%

84

Refrigerators

18%

16%

84

Machine tools

13%

16%

84

Ball or roller bearings

13%

16%

84

Non-electrical machinery

13%

16%

84

Fork Lift trucks

15%

16%

84

Parts of machinery

13%

16%

84

Air conditioners and parts

30%

24%

6%

85

Motors and generators

13%

16%

85

Parts of motors and generators

13%

16%

85

Electrical transformers, static convertors

13%

16%

85

Electric batteries and dry cells

18%

16%

85

Colour TV Sets

18%

16%

85

Electronic Components (capacitors, resistors , etc.)

18%

16%

85

Insulated wires and cables

18%

16%

85

Electrical Machinery

13%

16%

85

Domestic / electrical appliances

18%

16%

86

Railway wagons

15%

16%

86

Railway locomotives

15%

16%

86

Railway coaches / vans

15%

16%

87

Tractors (upto 1800 cc)

8%

8%

87

Tractors (above 1800 cc)

13%

16%

87

Ambulances

15%

16%

87

Commercial vehicles (Buses, trucks, etc.)

15%

16%

87

Mopeds

15%

16%

87

Motor Vehicle Parts

15%

16%

87

Taxis

25%

24%

87

Cars for physically handicapped persons

25%

24%

87

Scooters & Motor Cycles

25%

24%

87

Motor cars & other motor vehicles

40%

24%

16%

87

Vehicles for 7-12 persons

30%

24%

6%

89

Floating structures (Boats, etc.)

15%

16%

90

Medical equipment

8%

8%

90

Meters, measuring & checking instruments

13%

16%

90

Photographic cameras, etc.

18%

16%

91

Clocks

8%

8%

91

Watches (Assessable value upto Rs.600; now MRP upto Rs.850)

8%

8%

91

Watches (Assessable value above Rs.600; now MRP above Rs.850)

13%

16%

93

Arms and ammunitions

25%

24%

94

Medical furniture

8%

8%

94

Fittings for lamps and tubes

18%

16%

94

Mattresses, articles of beddings

25%

24%

95

Toys and games

13%

16%

96

Zip Fastners

8%

8%

96

Vacuum Flask

15%

16%

96

Others (like type writer ribbons, etc.)

18%

16%

II

EXCISE DUTY RATES IN TEA

• Duty on packaged tea abolished. However, excise duty at Rs 2 per kilogram imposed on bulk tea.

III

EXCISE DUTY RATES ON CIGARETTES

• Duty on mini cigarettes (non-filter cigarette not exceeding 60 mm in length) raised from Rs 100 to Rs 110 per thousand cigarettes.

IV

EXCISE DUTY ON DYEING OF YARN

• Exemption from excise duty on processes of dyeing, printing, bleaching or mercerising of spun yarn (other than 100% woollen and cotton yarn) available to independent processors abolished and now they will attract the normal duty applicable to these yarns. However, for independent processors who do not want to avail a modvat credit, a specific rate of duty of Rs 5 per kg has been prescribed.

V

RESTORATION OF 100% MODVAT AVAILMENT

• General restriction by 5% on full availability of MODVAT abolished.

• Restriction on full availability of MODVAT on petroleum products also abolished.

VI

CHANGES IN SSI EXEMPTION SCHEME

• Benefit of exemption in duty on goods bearing brand name of another person to be allowed but only when goods are made by SSI units located in rural areas. Details of scheme to be notified shortly.

• The general SSI exemption scheme extended to cotton yarn not containing synthetic staple fibre (Effective from 1st April, 1999).

• The scheme of duty exemption for SSI units manufacturing cosmetics, toilet preparations and air conditioning / refrigeration equipment and there parts, etc. is being modified as follows (Effective from 1st April, 1999):

Clearance value

Present rate

Proposed rate

• upto Rs.15 lakhs

Nil

Nil

• Rs.15 - 30 lakhs

50% of Normal duty

Nil

• Rs.30 - 50 lakhs

Normal duty

50% of normal duty

• Beyond Rs 50 lakhs

Normal duty

Normal duty

• The eligibility limit for availing the exemption is being enhanced from Rs 50 lakhs to Rs 100 lakhs.

VII

ADDITIONAL DUTY OF EXCISE ON HIGH SPEED DIESEL OIL

• An additional excise duty of Re 1 per litre imposed on High Speed Diesel Oil.

• This will come into force from 28th February, 1999.

VIII

EXPERT COMMITTEE

• An Expert Committee to be set up to examine and advise upon exemptions in excise.

IX

POWER OF THE GOVERNMENT TO GRANT AD-HOC EXEMPTION

• The power of the Government to grant ad-hoc exemption from excise duty by issue of special orders restricted to :

d   Goods of strategic nature

d   Goods of secret nature

k   Goods for charitable purposes

X

PROCEDURAL CHANGES IN PAYMENT OF EXCISE DUTY BY SSI UNITS

• SSI units will be allowed the facility to pay excise duty on monthly basis. This will be effective from 1st June, 1999.

XI

MAJOR PROCEDURAL CHANGES FOR FACTORIES PAYING DUTY OF MORE THAN Rs. 5 CRORE IN A YEAR

• To dispense with the separate excise records for factories paying duty of more than Rs. 5 crore in a year and accept their own records for excise purposes. This will be effective from 1st June, 1999.

XII

ADVANCE RULING AUTHORITY

• Legal provisions made in the Finance Bill, 1999 for setting up of Advance Ruling Authority to pronounce ruling regarding classification and valuation in advance for the benefit of joint venture with NRI's.

XIII

INTEREST ON PROVISIONAL ASSESSEMENTS

• Enabling legal provision made for charging or paying of interest on duty demand or refund on finalisation of provisional assessment under Central Excise.

XIV

LAPSING OF MODVAT CREDIT

• Section 37 of Central Excise Act proposed to be amended to enable Government to order lapsing of modvat credit in specific situations.

• Also, retrospective effect proposed to be given to wherever modvat credit was allowed to lapse in the past.

XV

CHANGES IN SECTION 4-A OF EXCISE ACT

• Penal provisions have been provided in case of manufacturers clearing any goods subject to MRP based valuation when he does not declare or tampers with / alters the declared retail prices.

• MRP based assessment extended to 27 more items.

XVI

FEES FOR FILING REVISION APPLICATION

• Fees for filing revision application raised from Rs 200 to Rs 1000 in those cases where the amount involved is more than Rs 1 lakh.

XVII

GOODS DEVELOPED AND PATENTED BY RESEARCH INSTITUTIONS

• Goods developed and patented by National Laboratories, public funded research institutions, colleges and universities and manufactured by Indian companies are being extended exemption from excise duty for a period of three years.

XVIII

SERVICE TAX

• Some procedural changes introduced.

Esimated Revenue Effect

Proposals relating to changes in Customs duties are estimated to result in net gain of

Rs.1,469 crore in a financial year. Proposals relating to changes in excise duties result in a net gain of Rs.4,765 crore in a financial year.

Memorandum showing the proposed revision of Postal Tariffs 1999 (Vide Clause No.136) of the Finance Bill, 1999

The maxima of the tariffs leviable for certain postal articles are prescribed by the First

Schedule in the Indian Post Office Act, 1898. Within the maxima so prescribed in respect of such articles and in respect of other postal articles not included in the Schedule and other services, the Central Government have the power to fix the rates by notification in the Official Gazette by amending Indian Post Office Rules, 1933 (vide Section 7 of the Indian Post Office Act, 1898).

2.

The proposals for revision of tariffs listed in the following table relating to postal articles

at serial Nos. 1 to 5 require an amendment to the First Schedule of the Indian Post Office Act, 1898 and these have been included in the Finance Bill. These changes as also the revision of tariffs for other postal services would be made by amending Indian Post Office Rules, 1933.

Sl.

Postal Service

Item

Existing

Item

Proposed

No.

Tariff

Tariff

1.

Printed Postcard

For a Printed Postcard

Rs.1.50

For a Printed Postcard

Rs.2/-

2.

Competition Post Card

For a Competition Post Card

Rs.3/-

For a Competition

Rs.4/-

Post Card

3.

Letter Cards

For a Letter Card

Rs.1.50

For a Letter Card

Rs.2/-

4.

Book pattern and sample

For the first 50 grams or

Re.1/-

For the first 50 grams

Rs.2/-

packet

fraction thereof

or fraction thereof

For every additional 50 grams

Rs.2/-

For every additional

Rs.3/-

or fraction thereof in

50 grams or fraction

excess of 50 grams

thereof in excess of

50 grams

5.

Parcels

For the first 500 grams or

Rs.10/-