Customs Act. 1962 -Amendments in Finance Bill 2020

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  • Clause (1) of the section 11(2) empowers the Central Government, for prevention of injury to the economy of the country by the uncontrolled import or export of gold or silver, to prohibit their import or export. This clause is being amended to include “any other goods (in addition to gold and silver) in its ambit”.
  • An Explanation is being inserted in section 28 to explicitly clarify that any notice issued under the said section, prior to the enactment of the Finance Act, 2018, shall continue to be governed by the section 28 as it existed before the said enactment, notwithstanding order of the Appellate Tribunal, any Court or any other law to the contrary.
  • A new Chapter VAA (a new section 28DA) is being incorporated in the Customs Act to provide enabling provision for administering the preferential tariff treatment regime under Trade Agreements. The proposed new section seeks to specifically provide for certain obligation on importer and prescribe for time bound verification from exporting country in case of doubt. Pending verification preferential tariff treatment shall be suspended and goods shall be cleared only on furnishing security equal to differential duty. In certain cases, the preferential tariff treatment may be denied without further verification.
  • A new section 51B is being inserted so as to provide for creation of an Electronic Duty Credit Ledger in the customs system. This will enable duty credit in lieu of duty remission to be given in respect of exports or other such benefit in electronic form for its usage, transfer etc. The provision for recovery of duties provided under Section 28AAA of Customs Act, 1962 are also being expanded to include such electronic credit of duties.
  • Section 111 is being amended to insert a new clause (q), to prescribe that goods imported on claim of preferential tariff treatment, and in relation to which any provision of Chapter VAA or of any rule made under this Act have been contravened shall be liable to confiscation.
  • Section 156 is being amended to insert a new clause (i) in sub-section (2) to empower the Central Government to make rules for the purpose of prescribing the manner, procedures, conditions, restriction and other issue to carry out the purposes of newly inserted Chapter VAA.
  • Section 157 (2) is being amended to empower the Central Government to make regulations for the purpose of prescribing the manner, procedures, conditions, restriction and other issues to carry out the purposes of newly inserted section 51B.

Imposition Of Health Cess On Import Of Certain Items

Clause [139] of the Finance Bill, 2020 read with Fourth Schedule to the said Bill provides for levy of ‘Health Cess’. Health Cess is proposed to be imposed on the import of Medical devices falling under headings 9018 to 9022, at the rate of 5% ad valorem on the import value of such goods as determined under Section 14 of the Customs Act, 1g62. This Health Cess shall be a duty of Customs. Any Export Promotion scrips shall not be used for payment of said Cess. Health Cess shall not be imposed on medical devices which are exempt from BCD. Further, inputs/parts used in the manufacture of medical devices will also be exempt from Health Cess. The proceeds of Health Cess shall be used by the Union for funding of health infrastructure In the Country.

Other Changes (Including Certain Clarifications! Technical Changes)

1.BCD on dyed woven fabric of yarn containing 85% or more by weight of textured polyester filaments, under tariff sub-heading “5407 52” has been prescribed by S. Nos. 47 and 48 of notification No. 14/2006-Customs dated 01.03.2006. S. No. 3 1A of notification No. 82/2017-Customs dated 27.10.2017 also prescribes rate on this item. This entry is being omitted.
2.(a) Technical changes of clarificatory nature are being made in Condition No. 78 so as to make It consistent with entry at S. No. 539 of notification No. 50/2017-Customs dated 30.06.2017. The said S. No. 539 deals with export of ground equipment imported for testing the satellite or payload, within a period of six months.
(b) A separate new condition (No. 107) is being incorporated for S. No. 539A, which deals with Scientific and Technical instruments, apparatus, equipment for launch of vehicle and satellite and payloads.
3.Entry at S.No. 28 of notification No. 50/2017-Customs dated 30.6.20 17 is being amended to retain only tariff item 0802 90 00 in it. The other goods hitherto covered in this entry have the tariff rate same as the duty rate prescribed in this entry. Hence, these items do not require inclusion in this entry.
4.Import of Bamboo for use In the manufacture of Agarbatti attracts concessional rate of 10% under Entry at S.No. 55 of notification No. 50/2017-Customs dated 30.6.2017. This concession shall henceforth be subject to actual user condition.
5.S.No. 57 of notification No. 50/2017-Customs dated 30.6.2017 (prescribing effective rate on certain edible oils) is redundant as these goods are covered in certain other entries with lower or equal applicable rates. Hence this entry is being omitted.
6.Goods falling Under heading 2801, 2802, 2803, 2804, 2805 and 2814 attracts 5% BCD by Tariff. However, S.No. 169 of notification No. 50/2017-Customs dated 30.6.2017 prescribes a BCD rate of 7.5%. This entry is being amended to remove this inconsistency.
7.Phosphoric acid attracts 5% BCD vide S. Nos. 170 (a conditional exemption) and 177 of notification No. 50/2017-Customs dated 30.6.2017. S. No. 170, is being omitted, being redundant.
8.S. No. 266 of notification No. 50/2017-Customs dated provides 7.5% BCD for goods falling under heading 3903. S. No. 262 is being amended to include heading 3903 so as to provide 7.5% BCD on goods of heading 3903. Accordingly, the redundant entry at S.No. 266, is being omitted.
9.S.No. 578 of the notification No. 50/2017-Customs, dated the 30.06.20 17 provides BCD exemption on assistive devices, rehabilitation aids and other goods for disabled as mentioned in Ust 30 to the said notification. The item at S. No. E(9) in this list is being amended to remove ambiguity about its scope. The intention has been to cover only such items which are for use of the disabled.
10.S.No. 408 (and Condition 51) of the notification No. 50/2017-Customs, dated the 30.06.20 17 provides concessional BCD rate of 5% on item for renovation and modernization of Fertilizer plants. It requires a technoeconomic clearance from Department of Fertilizer. The Condition No. 51 is being amended so as to remove this requirement.

Social Welfare Surcharge is being exempted on following items.

S.No.HS CodeDescription
10404 10 10Whey, concentrated, evaporated or condensed, liquid or semi solid
20406 90 00Cheese, Other
30601,0602Bulbs or tubers, other live plants
40802 12 00Almonds, Shelled
50802 31 00Walnuts, in shell
60802 32 00Walnuts, shelled
71001 11 00,
1001 91 00,
1001 99 20
Wheat and Meslin
81005 90Maize
91704 10 00Chewing Gum, whether or not sugar coated
101901 10Preparations suitable for Infant or young children, put up for retail sale.
112009 11 00Orange Juice, Frozen
122009 1200Orange Juice, not frozen, or a Brlxvaluenotexceedlng2o
132009 19 00Orange Juice, Other
142515 12 20Marble and travertine slabs
156802 10 00Tiles, cubes and similar articles, whether or not rectangular (including square), the largest surface area of which is capable of being enclosed in a square the side of which is less than 7 cm; artificially coloured granules, chippings and powder, other monumental or building stone and articles thereof, simply cut sawn with a flat even surface
166802 21 10Marble blocks/tiles
176802 21 20Marble monumental stone
186802 21 90Other tiles, cubes and similar articles
196802 91 00Marble, travertine and alabaster
206802 92 00Other calcareous stone
21*8702 or 8704All commercial vehicles (including electric vehicles), if imported as completely built unit (CBU).

* S. No. 21 will be exempt from levy of Social Welfare Surcharge with effect from 01.04.2020.

Exemption from Social Welfare Surcharge hitherto available on certain items falling chapters 84, 85 and 90, is being withdrawn. Accordingly, notification No 11/2018-Customs dated 02.02.2018 is being amended to, –

  1. omit entries falling under chapter 84, 85 and 90 covered under S. No. 1 of the Table of the said notification; and
  2. omit existing entries at S. Nos. 9 to 49 and 51 of the Table of the said notification.

Other Miscellaneous changes pertaining to Anti-Dumping Duty / Countervailing Duty

1.Anti-Dumping Rules provides for manner and procedure for investigation into dumping of goods that cause injury to domestic industry. These rules also provide for investigation into cases of circumvention of antidumping duty by the exporters of subject goods to India. Changes are being made In the Rules to strengthen the anti-circumvention measures by making them more comprehensive and wider in scope to take care of all types of circumventions of antidumping duty In line with best international practice. Certain other changes are being made in these Rules for bringing clarity in the scope of these rules
2.The Countervailing Duty Rules provide for manner and procedure for causing investigation into the cases of imports of subsidized goods that cause Injury to domestic industry. At present, there is no provision for Investigation In case of circumvention of countervailing duties. A provision is being incorporated in the Countervailing Duty Rules to enable investigation into case of circumvention of countervailing duty for enabling imposition of such duty. Certain other changes are being made for bringing clarity in the Rules
3.Revocation of Anti-dumping duty on import of Purified Terephthalic Acid originating in or exported from: South Korea and Thailand imposed vide notification No. 28/2019-Customs (ADD) dated 24.7.2019China, Iran, Indonesia, Malaysia and Taiwan imposed vide notification No. 28/2016-Customs (ADD) dated 5.7.2016





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