INSTRUCTIONS TO PARTICIPANTS In case the attendees have

INSTRUCTIONS TO PARTICIPANTS In case the attendees have

INSTRUCTIONS TO PARTICIPANTS In case the attendees have any questions, request you to post the same under the tab Questions on the right-hand side of your screen. Also mark us your queries on [email protected] Your questions shall be answered via mail to the concerned person in due course To allow attendees to log in and we shall start our speaking session at 10.05 am Nitya Tax Associates. All Rights Reserved During the entire session, all the attendees shall be kept on mute mode Nitya Tax Associates. All Rights Reserved UNION BUDGET 2018 Insights into key Indirect Tax changes February 2, 2018 Social Welfare Surcharge Change in BCD Rates CONTENTS LEGISLATIVE CHANGES Key amendments in the Customs Act Key amendments in the Customs Tariff Act

Nitya Tax Associates. All Rights Reserved RATE CHANGES Nitya Tax Associates. All Rights Reserved RATE CHANGES SOCIAL WELFARE SURCHARGE The existing Education Cess and SHE Cess have been done away with and are replaced by a new surcharge namely Social Welfare Surcharge (SWS) SWS is applicable on imported consignments from February 2, 2018 at the following rates: Nature of goods Rate of surcharge Base on which surcharge will be calculated All goods (except petrol, diesel, gold and silver) 10%

BCD** Petrol and Diesel 3% BCD + CVD Gold and Silver 3% BCD Nitya Tax Associates. All Rights Reserved * Not applicable on goods which were not subject to Education Cess and SHE Cess ** SWS exempt on IGST and GST Compensation Cess vide Notification No.13/2018Customs dated February 2, 2018 Credit of SWS paid will not be available to an importer and will be a cost Budget 2018 Key Indirect Tax changes Page 5 CHANGES IN BCD RATE BCD rate reduced to zero percent in case of following

Nature of goods Old Rate New Rate Solar tempered glass used for manufacture of solar cells / panels / modules 5% Nil Inputs or parts for manufacture of Printed circuit board assembly (PCBA) and moulded plastics for manufacture of charger of cellular mobile phones, subject to actual user condition Nil Effective from February 2, 2018 10% Budget 2018 Key Indirect Tax changes Nitya Tax Associates. All Rights Reserved Page 6

CHANGES IN BCD RATE (CONT.) Increase in BCD rate in case of following: Nature of goods Old Rate New Rate Refractory material 5% 7.5% Perfumery, cosmetics and toilet preparations 10% 20% Truck and bus radial tyres 10% 15% All kinds of footwears

10% 20% Parts of footwears 10% 15% Smart watches, wrist watches, pocket watches, stop watches 10% 20% Clocks 10% 20% Furniture and parts thereof 10% 20% Cellular mobile phones

15% 20% Accessories and parts of mobile phones such as charger, cell / battery, microphone, wired headset, USB cables, side keys, battery covers, camera lens, etc. 10% 15% Effective from February 2, 2018 Budget 2018 Key Indirect Tax changes Nitya Tax Associates. All Rights Reserved Page 7 CHANGES IN BCD RATE (CONT.) Increase in BCD rate in case of following (cont.): Nature of goods Old Rate

New Rate Printed circuit board assembly (PCBA) and moulded plastics for manufacture of charger of cellular mobile phones Nil 10% LCD / LED / OLED panels of television 7.5% 15% Other parts of LCD / LED / OLED TVs 10% 15% Completely Knocked Down (CKD) imports of motor vehicles falling under headings 8702, 8704 10% 15%

Completely Built Units (CBU) imports of motor vehicles falling under headings 8702, 8704 20% 25% CKD imports of motor cars under heading 8703 (with engine, gearbox, and transmission not in pre-assembled condition) 10% 15% Parts and Accessories under heading 8708, of motor vehicles falling under 8702, 8703 and 8704 10% 15% Spark ignition engines, compression ignition engines and parts thereof of motor vehicles falling under heading 8702, 8703, 8704 or 8711 7.5% 15% Effective from February 2, 2018

Budget 2018 Key Indirect Tax changes Nitya Tax Associates. All Rights Reserved Page 8 Nitya Tax Associates. All Rights Reserved LEGISLATIVE CHANGES A new system of advance payment of customs duty proposed. A taxpayer needs to deposit tax in advance in Electronic Cash Ledger which shall be subsequently utilized for making payment of customs duty, interest, penalty, fee etc. This concept is like system of maintaining Personal Ledger Account (PLA Account) under erstwhile Central Excise law. For the purposes of facilitation of trade, the Central Board of Indirect Taxes and Customs (Board) has been empowered to prescribe measures to simplify documentation, expedite clearance or reduce transaction cost for a class of importers or exporters or category of goods

The Central Government has been empowered to enter into agreement with Government of other countries for exchange of information for trade facilitation, effective risk analysis etc Effective from enactment of the Finance Bill, 2018 Budget 2018 Key Indirect Tax changes Page 10 Nitya Tax Associates. All Rights Reserved KEY AMENDMENTS IN CUSTOMS ACT KEY AMENDMENTS IN CUSTOMS ACT (CONT.) The following changes made in provisions relating to recovery of customs duty Pre-notice consultation Supplementary SCN Concept of pre-notice consultation [before issuance of Show Cause Notice (SCN)] introduced for cases not involving fraud etc

The department has been empowered to issue Supplementary SCN and such SCN shall be treated as Original SCN Effective from enactment of the Finance Bill, 2018 Budget 2018 Key Indirect Tax changes Nitya Tax Associates. All Rights Reserved Page 11 KEY AMENDMENTS IN CUSTOMS ACT (CONT.) The following changes made in provisions relating to recovery of customs duty (cont.) Adjudication of SCNs Strict timelines prescribed for adjudication of SCN Normal cases 6 months (further extension of 6 months) Fraud cases 1 year (further extension of 1 year)

If SCN is not adjudicated in original or extended period (as the case may be), it shall be deemed that no SCN was issued In exceptional situations like similar issue being pending in higher forum etc., the time limit will be correspondingly increased Where SCN is issued alleging fraud etc., invoking extended period of limitation and the department fails to establish the charges, SCN shall be deemed to have been issued for normal period of limitation Effective from enactment of the Finance Bill, 2018 Budget 2018 Key Indirect Tax changes Nitya Tax Associates. All Rights Reserved Page 12 KEY AMENDMENTS IN CUSTOMS ACT (CONT.) The Commissioner (Appeals) has been empowered to remand the matter back to the

adjudicating authority in the specified cases. Nitya Tax Associates. All Rights Reserved It is pertinent to note that though the specific power to remand the matter has now been conferred to the Commissioner (Appeals), various Courts have consistently held that the Commissioner (Appeals) inherently had the power to remand Effective from enactment of the Finance Bill, 2018 Budget 2018 Key Indirect Tax changes Page 13 KEY AMENDMENTS IN CUSTOMS ACT (CONT.) The following changes made in scheme of Advance Ruling The scope of seeking Advance Ruling extended to cover any question relating to goods prior to their importation or exportation The definition of applicant expanded to include any IEC holder, an exporter to India or any person applying having justifiable cause

The present Authority renamed as the Appellate Authority who will entertain appeals from the Customs Authority for Advance Rulings (CAAR) CAAR will be an officer of the rank of Commissioner / Principal Commissioner of Customs who will entertain applications at first stage The time limit of pronouncing advance ruling reduced to 3 months from 6 months Effective from enactment of the Finance Bill, 2018 Budget 2018 Key Indirect Tax changes Nitya Tax Associates. All Rights Reserved Page 14 KEY AMENDMENTS IN CUSTOMS ACT (CONT.) The scope of the Customs Act, 1962 (Customs Act) expanded to include offence or contravention committed outside India by any person It is pertinent to note that as the Customs Act does not have extra-territorial jurisdiction, such offence / contravention needs to relate to transactions taking place in India to which Customs law applies

The definition of Indian customs waters expanded to Exclusive Economic Zone (200 nautical miles from the coastal baseline) instead of earlier limit of Contiguous Zone of India (24 nautical miles) This change significantly expands the jurisdiction of the departmental officers to undertake investigations, inspection etc Specific provision incorporated to empower the Central Government to exempt duty on goods imported for repairs, processing or manufacture if the goods are exported within 1 year. Similar provision incorporated to exempt duty on goods re-imported within 1 year of their export for repairs, processing or manufacture Effective from enactment of the Finance Bill, 2018 Budget 2018 Key Indirect Tax changes Page 15 Nitya Tax Associates. All Rights Reserved KEY AMENDMENTS IN CUSTOMS TARIFF ACT New provision introduced for valuation of goods sold while deposited in custom bonded warehouse

The new provision is relevant for determining value of goods for payment of IGST and Compensation Cess The value of goods shall be the higher of: Nitya Tax Associates. All Rights Reserved Sale price of such goods (In case of multiple sale of goods lying in warehouse, sale price of last transaction); or Value of such goods under Section 14 of the Customs Act plus BCD plus Surcharge Effective from enactment of the Finance Bill, 2018 Budget 2018 Key Indirect Tax changes Page 16 Nitya Tax Associates. All Rights Reserved QUESTIONS? CALL US

+91 11 41091200-02 MAIL US [email protected] [email protected] SEND US A POSTCARD Nitya Tax Associates, B-3/58, 3rd Floor, Safdarjung Enclave, New Delhi-110029 www.nityatax.com Nitya Tax Associates. All Rights Reserved THANK YOU !!

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