Budget 2009-10 (Customs)

BUDGET 2009-10 [Customs Changes]

CUSTOMS:-

1. Changes in Rate of Customs Duty:-

Chapter	Product	Change	Remarks
Precious Metals
7108	Gold Bars, other than tola bars having serial no. of manufacturer/refiner engraved in it*	Basic custom duty increased from Rs. 100/gm to Rs. 200/gm	Not. No. 78/2009-Cus, dated 07/07/2009
7108	Gold Coins*	Basic custom duty increased from Rs. 100 per 10 gm to Rs. 200 per 10 gm	Not. No. 78/2009-Cus, dated 07/07/2009
7108	Gold in any other form*	BCD increased from Rs. 250 per 10 gm to Rs. 500 per 10 gm	Not. No. 78/2009-Cus, dated 07/07/2009
7106	Silver in any from*	BCD increased from Rs. 500 per Kg to Rs. 1,000 per Kg	Not. No. 78/2009-Cus, dated 07/07/2009
Capital Goods:
84 or 85	Specified plantation machinery (Capital Goods)	Concessional rate of BCD of 5% restores for one more year till 06.07.2010	Not. No. 77/2009-Cus, dated 07/07/2009
84 or 85	Mechanical harvester for coffee plantation (Capital Goods)	BCD reduced from 7.5% to 5%. Also, CVD exemption granted to harvesters.	Not. No. 77/2009-Cus, dated 07/07/2009
84 or any other chapter	Permanent magnets for manufacture of PM synchronous generators above 500KW for use in wind operated electricity generators	BCD reduced from 7.5% to 5%.	Not. No. 77/2009-Cus, dated 07/07/2009 [Condition also imposed in 35A]***
Electronic industry:
85	Set Top Boxes	100% Exemption withdrawn BCD of 5% imposed	Not. No. 77/2009-Cus, dated 07/07/2009
8529	LCD panels for manufacture of LCD televisions	BCD reduced from 10% to 5%	Not. No. 77/2009-Cus, dated 07/07/2009
84.5	Parts for manufacture of mobile phones and accessories	Full exemption from 4% special CVD given for 1 year till 06.07.2010	Not. No. 79/2009-Cus, dated 07/07/2009
Drugs and Medical Devices:
90 or any chapter	Patent Ductus Arteriosus/ Atrial Septal Defect occlusion devices	BCD reduced from 7.5% to 5% Nil CVD by way of excise duty exemption granted.	Not. No. 77/2009-Cus, dated 07/07/2009
90 or any chapter	Artificial Heart (left ventricular assist device)	BCD reduced from 7.5% to 5% Nil CVD by way of excise duty exemption granted.	Not. No. 77/2009-Cus, dated 07/07/2009
84 or any other chapter	Concrete batching plants of capacity 50 cum per hour or more**	BCD increased from nil rate to 7.5%	Not. No. 77/2009-Cus, dated 07/07/2009
Raw materials & Equipment for Leather goods, Textile products and Footwear Industry
52 or any Chapter	Knitted ribs	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Fittings, snaps of metal or alloys	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Metal fittings / embellishments, webbing of any material for making harness and saddlery items;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Stirrup of any material and stirrup bars used for making Saddle Tree;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Nylon polyester/PVE mesh and fabrics for making non-leather harness and saddlery items;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Beading material - synthetic / leather / fabric	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Chatons / stones / beads / crystals as decorative items;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Shoe laces;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Stretch fabric for shoe uppers;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Cork sheets for soles covering soles and insoles;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any Chapter	Artificial fur and alarm tag”;	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Goods designed for use in leather/ footwear industry substituted:-
84, 85 or 90	-Planing Machine added. -Cutting Press -conveyors for heat setting, cold setting, with or without vacuum included - film application machine -Injection moulding of EVA soles -chill setter machine included -Moccasin performing machine -Piping making machine with trimming and embellishment fixing machines -Polyurethane/PVC/ TPR and EVA sole, insole, midsole, heel, heel tip injection moulding machine (single or multiple station) -Fore part lasting machine PVC/PU/ EVA direct injection soling machine (DIP construction) -Scissors type and nibbling type machines for plates -Taping and seam rubbing machine -Stapling machine for bows to uppers of leather shoes -Bias tape cutting machine -Dust collector and exhaust systems	BCD exemption of 5% granted	Not. No. 77/2009-Cus, dated 07/07/2009
Raw materials/Inputs for Sports Goods
Any	Synthetic rubber bladder	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any	Macau cane	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any	Table tennis rubber	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any	Table tennis bat handles	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Any	Table tennis blade	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
28,29 or 30	Drugs, Medicines, Diagnostic kit or equipment:- -Abatacept -Daptomycin -Entacevir -Fondaparinux Sodium - Influenza Vaccine -Ixabepilone -Lapatinib -Pegaptanib Sodium injection -Suntinib Malate -Tocilizumab”;	Exemption rate of 5% BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
Others / Miscellaneous:-
0508	Unworked Corals	BCD reduced from 5% to NIL	Not. No. 77/2009-Cus, dated 07/07/2009
5202 and 5103	Cotton waste and wool waste	BCD reduced from 15% to 10%	Not. No. 77/2009-Cus, dated 07/07/2009
2510	Rock Phosphate	BCD reduced from 5% to 2%	Not. No. 77/2009-Cus, dated 07/07/2009
9801	Aerial Passenger Ropeway Projects	100% CVD exemption withdrawn. Applicable rate of CVD will apply.	Not. No. 77/2009-Cus, dated 07/07/2009
9506, 8907 10 00	Inflatable rafts, snow skis, water skis, surf-boats, sail-boards and other water sports equipment.	Full exemption from BCD granted	Not. No. 77/2009-Cus, dated 07/07/2009
29/38	Bio-diesel	BCD reduced from 7.5% to 2.5%	Not. No. 77/2009-Cus, dated 07/07/2009

* Revised rates applicable to gold and silver including gold/silver ornaments (excluding ornaments studded with stones or pearls) imported as baggage.

** BCD exemption was available by virtue of exemption on specified machinery for construction on roads.

***If the importer at the time of importation,-

(a) furnishes a certificate to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, from an officer not below the rank of a Deputy

Secretary to the Government of India in the Ministry of New and Renewable Energy recommending the grant of this exemption and the said officer certifies that the goods are

required for the specified purpose; and

(b) furnishes an undertaking to the said Deputy Commissioner or Assistant Commissioner to the effect that,-

(i) he shall use the goods for the specified purpose; and

(ii) in case he fails to comply with sub-condition (i), he shall pay an amount equal to the difference between the duty leviable on the imported goods but for the exemption under this notification and that already paid at the time of importation.

2. Concessions and Exemptions:-

The following concessions/ changes have also been made:

IT Software:-

On packaged or canned software, CVD exemption has been provided on the portion of the value which represents the consideration for transfer of the right to use such software, subject to specified conditions. This has been done vide Notification No. 80/2009-Cus, dated 07/07/2009.

“Packaged or canned software” has been explained as “software developed to meet the needs of variety of users, and which is intended for sale or capable of being sold off the shelf”.

This portion of the value is leviable to service tax as “Information Technology Software Service’.

Specified Conditions are:-

- the transfer of the right to use shall be for commercial exploitation including the right to reproduce, distribute and sell such software and right to use the software components for the creation of and inclusion in other information technology software products.

- the importer shall make a declaration to the Assistant Commissioner of Customs or the Deputy Commissioner of Customs, as the case may be, in respect of such transfer of the right to use for commercial exploitation.

- the importer shall be registered under section 69 of the Finance Act, 1994 read with rule 4 of the Service Tax Rules, 1994.

Important Legislative amendments:

The major changes have been made in the Customs Act, 1962 and Customs Tariff Act, 1975 which are discussed below:

AMENDMENTS TO CUSTOMS ACT, 1962

1. Refund of Import duty when imported goods are defective or not conforming to quality standards specified by Importer:-

Section 26A has been inserted in the Customs Act to provide for refund of import duty paid on imported goods if they are found to be defective or not conforming to the specifications agreed upon between the importer and the seller, subject to certain conditions.

2. Advance Ruling:-

Section 28F of the Customs Act has been amended to provide that the Central Government may by notification authorize the Authority for advance Ruling constituted under Section 245-o of the Income Tax Act to act as an Authority for the purposes of customs, central excise and service tax subject to some modification regarding the constitution of the Authority. The change will come into effect from a date to be notified.

3. Condonation of Delay in filing appeals/applications/cross objections:-

Section 130 and 130A of the Customs Act have been amended to empower the High Court to condone the Delay in filing of appeals/ applications/memorandum of cross objections where it is satisfied that there is sufficient cause for delay.

4. Exclusion of certain offences & circumstances from Compounding Provisions:-

Section 137 of the Customs Act has been amended to exclude certain types of offences and circumstances from the purview of compounding provisions.

AMENDMENTS TO CUSTOMS TARIFF ACT, 1975

1. Value of like imported article for charging Additional Duty:-

Section 3 of the Customs Tariff Act has been amended so as to provide that where the Central Government has fixed tariff value for collection of central excise duty on an article produced or manufactured in India, the value of a like imported article for the purpose of charging additional duty shall be such tariff value.

2. Amendment of Section 8B, 8C, 9 and 9A for extending machinery provisions of Customs Act to duties levied under these sections:-

Section 8B (Power of Central Government to impose safeguard duty), Section 8C (Power of Central Government to impose transitional product specific safeguard duty on imports from the People's Republic of China.), Section 9 (Countervailing duty on subsidized articles) and Section 9A (Anti-dumping duty on dumped articles) of the Customs Tariff Act, 1975 have been amended retrospectively so as to extend the machinery provisions of the Customs Act to the duties levied under these provisions.

3. Amendment of sub-section (6A) of Section 9A:-

Section 9A provides for “Anti-dumping duty to be imposed on dumped articles”.

Sub-section (6A) has been inserted in section 9A of the Customs Tariff Act so as to provide that the margin of dumping in relation to an article exported by an exporter or producer shall be determined on the basis of records maintained by such exporter or producer and on the basis of information available in the case of non-cooperating exporter or producer.

4. Para (A) in Note 2 of Section XI of the Customs Tariff Act has been amended so as to align it with the parallel provision in the Central Excise Tariff Act.

5. Rebate of duty for locally procured materials used in manufacture of exported goods (DFIA Scheme):-

Notification no. 40/2006-Customs dated 01.05.2006 provides exemption to materials imported into India against a Duty Free Import Authorisation from the duty of Customs and the additional duty, safeguard duty and anti-dumping duty.

Notification no. 40/2006-Customs dated 01.05.2006 is sought to be amended retrospectively from its date of issue so as to allow the facility of rebate in respect of locally procured materials used in the manufacture of goods exported under the duty free import Authorisation Scheme and to carry out other related changes.

6. Retrospective Amendment to Notification appointing DGCEI officers as Customs Officers:-

Notification No. 27/2009-Customs (NT) dated 17.03.2009 appointing officers of DGCEI as officers of customs with all India jurisdiction is sought to be given retrospective effect from 09.05.2000.

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Budget 2009-10 (Customs)

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