BUDGET 2016- Customs & Central Excise (Non-Tariff Amendments)

In Budget 2016, various amendments are made in Customs and Central Excise.  The amendments effecting the rate of duty are compiled separately.  In this compilation,  amendments, other then effecting the rate of duty are compiled.  Please feel free to communicate for any further clarification.


Customs  Law

  • The control over warehouses will be record based only, except a new class of warehouse, storing specified goods, under physical control.
  • The time period for issue of Show Cause Notice extended to two years from one year.
  • Provisions incorporated for deferred payment of Customs duty.
  • The license for Public Warehouse and Private Warehouse shall be granted by Principle Commissioner / Commissioner of Customs. Earlier, the power was vested with Assistant / Deputy Commissioner.
  • Baggage Rules are replaced by new rules.
  • The existing Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 are being substituted by new rules.
  • Interest rate on delayed payment of Customs Duty rationalized at 15%.

Excise Law

  • The normal limitation period for issue of Show Cause Notice, extended from One year to two years.
  • Central Excise Returns to be filed by an assessee reduced from 27 to 13.
  • Facility of revision of return extended to Central Excise Returns.
  • In case of Provisional Assessment, interest will be charged from the original due date.
  • In case of Digitally signed Invoice, the requirement of manual attestation of Invoice for transportation is done away.
  • The existing Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable and Other goods) Rules, 2001 are being substituted with new rules.
CENVAT Credit Rules, 2004
  • Equipments and Appliances used in the office situated in factory are included in definition of Capital Goods.
  • CENVAT Credit on inputs and capital goods used for pumping of water for captive use in the factory is being allowed even where such capital goods are installed outside the factory.
  • All Capital Goods having value up to Rs. Ten Thousand per pice are being included in the definition of inputs.
  • Service by way of transportation of goods by a vessel from India to outside India is being excluded from the definition of exempted services. It will allow shipping lines to take credit on inputs and input services used for provision of said services.
  • CENVAT Credit on tools falling under Chapter 82, even when used in the premises of a job-worker.
  • The permission for clearing goods directly from the premises of job-worker which is till now valid for financial year is extended to be valid for three years.
  • Service Tax paid on Upfront Charges paid on assignment of natural resources, such as Mining, Spectrum etc. will be available as CENVAT Credit by spreading over the same for the period of such assignment.
  • Provisions for proportional reversal of credit contained in Rule 6 are re-drafted.
  • Rule 7 dealing with the distribution of Credit by input Service Distributor is being rewritten.
  • Rule 7B is inserted to enable manufacturers with Multiple Manufacturing Units to maintain a Common Warehouse for inputs and distribute inputs with credits to the individual manufacturing units.
  • Invoice issued by Service Provider for clearance of inputs and capital goods will be valid document for taking CENVAT Credit.
  • A new Annual Return is prescribed in Rule 9A which is to be filed by manufacturers and service providers.