BUDGET HIGHLIGHTS- INDIRECT TAXES

CUSTOMS

• Proposed reduction in Customs duty on inputs and raw materials like mineral fuels, metals, renewable energy etc. to reduce costs.

• Changes in Customs and Excise / CV duty to address the problem of duty inversions in certain sectors as under:

ü  Chemicals & Petrochemicals

ü  Textiles

ü  Metals

ü  Automobiles

ü  Renewable Energy

• Changes in Customs duty to provide adequate protection to domestic industry as under:

ü  Food processing

ü  Electronics / Hardware

• Promotion of cashless transactions and promote domestic manufacturing of devices used thereof.

• While excise duty cut of Rs 2 /litre on unbranded diesel and petrol is a strong positive in the Budget.

• Exemption may be provided on such of the goods, which are imported for the purposes of repair, further processing or manufacture, as, may be specified therein, from custom duty subject to the prescribed conditions.

• Similarly, exemption may be provided in relation to such of the goods which are re-imported after being exported for the purposes of repair, further processing or manufacture, as may be specified therein, from custom duty subject to the certain conditions.

• Where an order for refund under section 27(2) is modified in any appeal and the amount of refund so determined is less than the amount refunded, the excess amount so refunded shall be recovered along with interest at the rate fixed by the Central Government under section 28AA, from the date of refund up to the date of recovery.

• The definition of advance ruling have been amended as under:

‘(b) "advance ruling" means a written decision on any of the questions referred to in section 28H raised by the applicant in his application in respect of any goods prior to its importation or exportation'

• The proper officer may carry out the audit of assessment of imported goods or export goods or of an auditee under Custom Act either in his office or in the premises of the auditee in such manner as may be prescribed. For the purposes of this section, "auditee" means a person who is subject to an audit under this section and includes an importer or exporter or custodian approved under section 45 or licensee of a warehouse and any other person concerned directly or indirectly in clearing, forwarding, stocking, carrying, selling or purchasing of imported goods or export goods or dutiable goods.

• Notification No 50/2017-Customs amended by Finance Bill, 2018 as under:

"Notification No. 65/2017-Customs dated 8th July 2017 amending notification No. 50/2017- Customs dated 30th June 2017 is proposed to be given retrospective effect so as to exempt integrated tax leviable under section 3(7) of the Customs Tariff Act, 1975 on aircrafts, aircraft engines and other aircraft parts imported under cross-border lease during the period from the 1st July, 2017 to the 7th July, 2017 subject to the payment of Integrated tax leviable under section 5(1) of the IGST Act, 2017 on the said supply."

SERVICE TAX

• Special provision for retrospective exemption from service tax in certain cases relating to life insurance services provided by Naval Group Insurance Fund to personnel of Coast Guard during the period commencing from the 10th day of September, 2004 and ending with the 30th day of June, 2017 (both days inclusive).

• Special provision for retrospective exemption from service tax in certain cases relating to services provided or agreed to be provided by Goods and Services Tax Network during the period commencing from the 28th day of March, 2013 and ending with the 30th day of June, 2017 (both days inclusive)

• Special provision for retrospective exemption from service tax on Government's share of profit petroleum during the period commencing from the 1st day of April, 2016 and ending with the 30th day of June, 2017 (both days inclusive).

Note : an application for the claim of refund of service tax in relation to above provisions shall be made within a period of six months from the date on which the Finance Bill, 2018 receives the assent of the President

GENERAL

• Name of Central Board of Excise and Customs is being changed to Central Board of Indirect Taxes and Customs with consequential amendments in the following Acts: -

i. The Central Boards of Revenue Act, 1963 (54 of 1963)

ii. The Customs Act, 1962 (52 of 1962)

iii. The Central Goods and Services Tax Act, 2017 (12 of 2017)

• Following enactment have been repealed:

ü  Additional duty of Customs on Motor Spirit commonly known as Petrol is being abolished by repealing section 103 of the Finance Act (No.2), 1998.

ü  Additional duty of Excise on Motor Spirit commonly known as Petrol is being abolished by repealing section 111 of the Finance Act (No.2), 1998.

ü  Additional duty of Customs on High Speed Diesel oil is being abolished by repealing section 116 of the Finance Act, 1999.

ü  Additional duty of Excise on High Speed Diesel oil is being abolished by repealing section 133 of the Finance Act, 1999.

ü  Education Cess on imported goods is being abolished by omitting Chapter VI of the Finance Act (No.2), 2004.

ü  Secondary and Higher Education Cess on imported goods is being abolished by omitting Chapter VI of the Finance Act, 2007.