Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver   *   Imposition of anti dumping duty "Ammonium Nitrate"originating in exported from Russia, Indonesia, Georgia and Iran *   Exemption to a person making inter-State taxable supplies of handicraft goods from the requirement to obtain registration granted  *   Exemption from registration to job-workers making inter-State supply of services to a registered person granted *  The notification amends the rates of compensation cess on various motor vehicles *   Clarifcation for classification and GST rate on lottery *   Directions to Bank regarding export to Algeria *   Implementation of Notification No. 19 dated 5.8.2017 *   Enlistment of Agricultural and Processed Food Products Export Development Authority (APEDA) under Appendix 2C & 2E *   Extension in last date of  Export of preferential quota sugar to USA under TRQ quota *   Correction / Amendments in Table 2 of Appendix 3B Foreign Trade Policy 2015-20 *   Proformae for submission of applications for export of Red sanders wood and import of sandalwood notified *   Amendment in import policy of raw sugar *   Revision in Policy condition no 2 to Chapter 95 of ITC(HS), 2017 *   Clarification on difficulties related to recent amendments in Customs Act, 1962. *   Implementation of electronic sealing for containers by exporters *   Rate of exchange of conversion of the foreign currency with effect from 08.09. 2017 {See notification no 84/2017-Cus (NT),dt. 07.09.2017 in What’s new} *   Jurisdiction of customs officers for the purpose of audit defined {See notification no 85/2017-Cus (NT),dt. 07.09.2017 in What’s new} *   GST Workshop for babus held *   GST cess hike on luxury cars approved by cabinet *   Punjab Govt unable to pay salary to its employees *   Narendra Modi Proposes GST Registration for small traders. *   Govt restricts imports of gold, silver from South Korea  *   West Bengal Sweetmeat Makers go on Hunger-strike Against GST *   Appointment of officers as the Principal Chief Commissioners of Customs or Chief Commissioners of Customs and allotted their jurisdiction *   Amendment in Para 4.32(i) of chapter 4 and in para 6.01 (a) of chapter 6 of the Foreign Trade Policy 2015-20 *   Supply of essential commodities to the Republic of Maldives during 2017-18 *   Rate of exchange of conversion of the foreign currency with effect from 18th August, 2017 notified  *   Classes of persons who shall pay customs duty electronically notified *   Change in AIRs of Duty Drawback on Gold Jewellery, Silver Jewellery and Silver Articles 
Subject News *   Extension in the last date for filing the return in FORM GSTR-3B for the months of August to December, 2017 *   Seventh amendment to the CGST Rules, 2017 *   Notifying section 51 of the CGST Act, 2017 for TDS *   Granting exemption from registration to a casual taxable person making taxable supplies of handicraft goods. *   Extension in the time limit for filing of GSTR-6. *   Extension in the time limit for filing of GSTR-1, GSTR-2 and GSTR-3. *   Amendment in certain customs notifications in pursuance to change made in Budget 2017-18. *   Exemptions to goods imported for organising FIFA under 17, world cup, 2017 *   Seeks to extend due dates for furnishing details/Returns for the months of July, 2017 and August, 2017. *   System based reconciliation of information furnished in FORM GSTR-1 and FORM GSTR-2 with FORM GSTR-3B *   Single point service Contact@DGFT eastablished. *   Imposition of CVD on imports of Certain Hot Rolled and Cold Rolled Stainless Steel Flat Products *   Reduction of BCD on raw sugar upto a quantity of 3 lakh MT {See notification no 74/2017-Cus,dt. 07-09-2017in What’s new} *  Seeks to continue anti-dumping inforce concerning imports of "Metronidazole" originating in exported from China PR *  seeks to levy definitive anti-dumping duty, on Castings for Wind Operated Electricity Generators *  seeks to impose anti-dumping duty on "Styrene Butadiene Rubber (SBR) *   What is Form GST TRAN-1 and when to File it *   How To Revise Invoice In GST *   Advertising space in print media to attract 5% GST *  Seeks to impose anti-dumping duty on " TexturedToughened (Tempered) Glass ", originating in or exported from China PR *  Seeks to amend notification No. 49/2012 - Customs (ADD) dated the 26th November,2012 to modify the amount of anti-dumping duty on import of Caustic Soda originating in or exported from Iran, Saudi Arabia and USA. *  Seeks to impose anti-dumping duty on the imports of "Sodium Nitrite" originating in or exported from China PR. *  Notification No.82/2017-Customs (N.T.) dated 24th August, 2017 *  Amendment in import policy of Beans of the species Vigna mungo (L.) Hepper or Vigna radiate (L.) Wilczek under Chapter 7 of the ITC (HS) 2017, Schedule â I (Import Policy) *  Amendment in Para 3.24(j) of Chapter-3 of FTP 2015-20 *  Amendment in Para 2.07 of Foreign Trade Policy 2015-2020. *  Amendment in import policy of gold and silver under Chapter 71 of the ITC(HS) 2017, Schedule -I (I) *   Seeks to modify the amount of anti-dumping duty on import of Caustic Soda originating in or exported from Iran, Saudi Arabia and USA *   Seeks to impose anti-dumping duty on the imports of "Sodium Nitrite" originating in or exported from China PR *   Amendment in the CGST Rules, 2017   

Comments

Publish Date: 21 Mar, 2016
Print   |    |  Comment

Mobile Accessories turns expensive

Mobile Accessories turns expensive

 

An article by:-
CA Pradeep Jain
CA Neetu Sukhwani &
Monika Tak

 
Introduction:-
With the hype created regarding implementation of revolutionary taxation reform, i.e., GST in the financial year 2016-17, the government attempted to mentally prepare the assessees as regards substantial reduction in the exemptions available. This is reflected by the levy of excise duty on jewellery except pure silver jewellery. Furthermore, government has also withdrawn exemptions on charger/adapter, battery, wired headsets/speakers etc. usually accompanied by the mobile handsets. This article is an attempt to present the excise duty rates applicable to parts and accessories of mobile handsets.
Glance at the erstwhile provision:-
 

S.No. Chapter Heading Description of goods Rate Condition
272 85 or any other chapter (a)Parts, components and accessories of mobile handsets including cellular phones
(b)Parts, components of battery chargers and hands-free head-phones and PC connectivity cable of mobile handsets including cellular phones;
(c)  Sub-parts of (a) and (b)
Nil 2

 
Condition no. 2:- Where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed.
 
Glance at the amended provisions:-
 

S.No. Chapter Heading Description of goods Rate Condition
272 85 or any other chapter (a)Parts, components and accessories excluding Charger or Adapter, Battery, Wired Headsets and Speakers  of mobile handsets including cellular phones
(b)Parts, components of battery chargers and hands-free head-phones and PC connectivity cable of mobile handsets including cellular phones;
(c)  Sub-parts of (a) and (b)
Nil 2

 
Apart from above, new serial entries have been inserted with respect to charger, adapter, battery, wired headsets and speakers which is reproduced for the sake of quick reference as follows:-

S. no. Chapter or heading or sub heading or tariff items of first schedule Description of excisable goods Rate Conditions
“263B 8504 Charger or adapter for manufacture of mobile handsets including cellular phones. 2% 2 and 16
263C 85 or any other Chapter (a) Inputs or parts for manufacture of charger or adapter of mobile handsets including cellular phones
(b) Inputs or sub-parts for manufacture of parts mentioned at (a) above
Nil 2
263D 8506, 8507 Battery for manufacture of mobile handsets including cellular phones 2% 2 and 16
263E 85 or any other Chapter (a) Inputs or parts for manufacture of battery of mobile handsets including cellular phones
(b) Inputs or sub-parts for manufacture of parts mentioned at (a) above
 
Nil 2
263F 8518 30 00 Wired headsets for manufacture of mobile handsets including cellular phones. 2% 2 and 16
263G 85 or any other Chapter (a) Inputs or parts for manufacture of wired headsets of mobile handsets including cellular phones
(b) Inputs or sub-parts for manufacture of parts mentioned at (a) above
Nil 2
263H 8518 Speakers for manufacture of mobile handsets including cellular phones 2% 2 and 16
263I 85 or any other Chapter (a) Inputs or parts for manufacture of speakers of mobile handsets including cellular phones
(b) Inputs or sub-parts for manufacture of parts mentioned at (a) above
Nil 2

 
For the exemption following conditions should be fulfilled:-
Condition no. 2:- Where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed.
Condition no. 16:- If no credit under rule 3 or rule 13 of the CENVAT Credit Rules, 2004 has been taken in respect of the inputs or capital goods used in the manufacture of these goods.
 
Analysis of the amendment:-
In Budget 2016-17, excise duty exemption has been withdrawn on accessories i.e. charger/adapter, battery and wired headsets/speakers for use in manufacture of mobile handsets including cellular phones. However, concessional rate of 2% only if used by mobile handset manufacturers but this concessional rate is not applicable in case where charger/adapter, wired headsets/speakers etc. are sold in open market. Moreover, the exemption is continued on Inputs or parts for manufacture of charger or adapter, battery and wired headsets/speakers of mobile handsets including cellular phones.
 
Furthermore, the reduced rate of 2% is applicable on accessories subject to the condition that Cenvat Credit on Inputs and Capital Goods has not been availed.
It is worth noting that similar changes have also been made in Customs. Basic Customs Duty, CVD and SAD exemptions are being withdrawn on charger/Adapter, Battery and Wired Headsets/Speakers for use in manufacture of mobile handsets. Furthermore, Basic Customs Duty and CVD are being exempted on inputs and parts for manufacture of charger/adapter, battery and wired headsets/speakers of mobile handsets including cellular phone and inputs and sub-parts for use in manufacture of parts of charger/adapter, battery and wired headsets/speaker. Consequently, these goods will also be exempt from SAD.
 
 
Good bye words:- The manufacturers of mobile handsets including cellular phones have the option to clear mobile handsets at the concessional excise duty of 1% provided no cenvat credit on inputs/capital goods is being availed. Now, concessional rate of 2% without cenvat is being specified for adaptors, chargers, wired headsets/speakers etc. Hence, the mobile manufacturers may either opt for cenvat credit facility by paying excise duty at full rate or adopt the practise of expensing the concessional excise duty without availing any cenvat credit.

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com