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News Indirect Tax-Customs

  • Feb 02, 2023
  • Govt hikes import duty on toys to 70%

    The government on Wednesday increased the import duty on toys and its components to 70 per cent with a view to cut inbound shipments of these products and boost domestic manufacturing activities. Similarly, import duty on bicycles has also been hiked to 35 per cent from 30 per cent, according to a Union Budget document.

    Import duty hike on toys and parts of toys excludes parts of electronic toys.

    Earlier, basic customs duty on toys was increased from 20 per cent to 60 per cent in February, 2020 to promote local manufacturing.

  • Feb 02, 2023
  • India raises tax on imported cars, motorbikes, including EVs in a bid to boost "Make in India" scheme

    India on Wednesday said it will raise taxes on imported cars and motorbikes, including electric vehicles (EVs), as it seeks to boost local manufacturing in line with Prime Minister Narendra Modi's "Make in India" campaign ahead of elections in 2024.

    All vehicles with a landed cost of less than $40,000 will be taxed at 70%, up from 60% earlier, a move analysts say could impact demand. The landed cost includes the vehicle's price tag plus insurance and freight costs.

    Import tax on all semi-knocked-down cars - where major parts are imported separately and the final vehicle is assembled in the country - will be raised to 35% from 30%.

  • Feb 02, 2023
  • Finance Minister Nirmala Sitharaman announces rejig in customs duty, details here

    With promotion of exports and enhancement of domestic manufacturing in focus, Finance Minister Nirmala Sitharaman on Wednesday announced a rejig in custom duties on various commodities and products.

    The concessional duty on the import of lithium-ion batteries has been extended for a year.

    The customs duties on dore and bars of gold and platinum were increased earlier this fiscal. FM proposed to increase the duties on articles made therefrom to enhance the duty differential. "I also propose to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum," she said.

    The basic customs duty rate on compounded rubber will be increased from 10% to 25% or Rs 30/kg, whichever is lower, on par with that on natural rubber other than latex, to curb circumvention of duty.

  • Jan 17, 2023
  • Imports of Covid-19 vaccines exempted from customs duty till March 31

    The government has exempted customs duty on imports of Covid-19 vaccines till March 31, 2023 in a bid to ensure domestic availability amid fears of a surge in coronavirus infections. In a notification, the Central Board of Indirect Taxes and Customs (CBIC) said Covid vaccines, when imported into India by central government or state governments, would be exempt from the whole of customs duty from January 14, 2023 till March 31, 2023.

    The government had, in April 2021, first exempted Covid-19 vaccines from 10 per cent customs duty. The exemption was extended several times till June 2022.

    With new variants causing significant rise in daily case load in certain countries, including neighbouring China, the government had re-introduced certain precautionary measures, like random passenger testing at airports and genome sequencing, to check Covid spread in India.

  • Jan 12, 2023
  • CBIC to release list of identified goods to check undervaluation of imports

    The CBIC on Wednesday came out with a mechanism to check the undervaluation of imported goods under which two committees comprising tax officers will be set up for screening and evaluation.

    The CBIC has notified the Customs (Assistance in Value Declaration of Identified Imported Goods) Rules, 2023, which will come into effect from February 11.

    The Central Board of Indirect Taxes and Customs (CBIC) will come out with a list of 'identified goods', which will be subject to stricter scrutiny for their true value.

    As per the rules, two committees will be constituted -- a screening committee for a preliminary examination of 'identified goods' and an evaluation committee for a detailed examination.

  • Jan 12, 2023
  • New rules on Customs valuations from Feb 11

    The government on Wednesday notified new rules to address the menace of undervalued imports, proposed in the Budget, which will kick in on February 11 and could help raise revenue marginally.

    The Customs (Assistance in Value Declaration of Identified Imported Goods) Rules, 2023 will identify a list of goods where there is reason to believe the value may not be declared truthfully or accurately and the importer would have to undertake additional obligations in this regard. The Central Board of Indirect Taxes and Customs can specify such goods, which would be examined by a screening committee and later by an evaluation committee. “The written reference must have been made to the board which, if found suitable by screening committee for detailed examination, must have been comprehensively examined by evaluation committee which should have concluded the likelihood that the value of the relevant class of goods may not be declared truthfully …,” said the CBIC in a circular, adding that if satisfied, the board may then specify the identified goods.

  • Dec 26, 2022
  • Customs notifies Rules of Origin for India-Australia trade pact

    With the India-Australia interim trade deal set to kick off later this month, the Central Board of Indirect Taxes and Customs has notified the Rules of Origin. The notification, which relates to the eligibility requirement to claim the preferential customs duty on trade in goods, under the economic cooperation and trade agreement (ECTA), will come into effect from December 29. This is when the ECTA will also come into effect.

    RoAs specify the threshold for value addition in the country concerned to qualify for the tax concessions under the FTA, so that the benefits are not misused by firms based in other countries.

  • Dec 19, 2022
  • Centre to levy import duties on non-essential items as exports fall: Report

    The Centre may hike the duties on imports of "non-essential items" ahead of growing concerns around a slowdown in exports and a widening trade deficit. Several ministries are in the process of shortlisting the commodities for duty hikes, as reported by the Indian Express (IE). The list will reportedly be restricted to only the commodities that have "enough manufacturing capacity" in the country.

    "We are looking at non-essential imports for which there is enough manufacturing capacity. It is to identify non-essential items, where there is sufficient production capacity and allow for higher import substitution," an official told IE.

  • Dec 09, 2022
  • CBIC issues draft rules for Customs valuation

    Importers will have to furnish additional information at Customs Automated System and while filing a bill of entry in case of "specified goods"

    The Central Board of Indirect Taxes and Customs (CBIC) has released the draft rules pertaining to the Customs Valuation of imported goods, which will effectively implement the amendment proposed in Section 14 of the Customs Act which deals with the valuation of imported goods.

  • Sep 01, 2022
  • Customs to begin uniform faceless assessment system for clearance of imported goods in phases from Sep 5

    The Customs department will begin a standardised risk-based faceless assessment system across the country for clearance of imported consignments in phases starting with metal, from September 5. This would promote ease of doing business as it would bring uniformity in customs examination, and reduce the time taken for clearing consignments. The Central Board of Indirect Taxes and Customs (CBIC) in a circular to field offices said the National Customs Targeting Centre (NCTC) has developed system generated centralized examination orders for Bills of Entry (BoE), based on various parameters, and this will be rolled out in phases.

  • Aug 18, 2022
  • Customs violations: Monetary limit for legal action raised

    The Central Board of Indirect Taxes and Customs (CBIC) on Wednesday increased the threshold monetary limit for prosecution and arrest for customs violations. In baggage and outright smuggling cases, the threshold market value of goods or foreign currency has been increased from over Rs 20 lakh to over Rs 50 lakh for legal action. In the case of commercial frauds, the threshold value of offending goods has been enhanced to Rs 2 crore from Rs 50 lakh.

  • Jul 22, 2022
  • CBIC vetting paperless customs rules for SEZs

    A proposal for a completely paperless customs compliance framework for special economic zones (SEZs) is being reviewed by the Central Board of Indirect Taxes and Customs (CBIC), said officials.

    The framework will be in sync with new legislation proposed by the Centre to turn the SEZs into comprehensive economic hubs, with larger participation of states and further ease of compliance to attract investment.

    A working group of officers recently submitted a detailed report identifying processes which can be migrated to the ICES (Indian Customs EDI System) or the Indian Customs Electronic Gateway (ICEGATE) system to make the customs process automated and smooth. The CBIC has identified processes, including filing bills of entry, filling shipping bills and risk-based examination of cargo which will be migrated to the ICES systems. "We did a very comprehensive review of part of the touch points between the customs and SEZ units and the processes involved and how we can automate them," a senior official told ET.

  • Jul 15, 2022
  • CBIC notifies controlled delivery regulation; authorised officials to place tracking devices on consignments

    The Central Board of Indirect Taxes and Customs (CBIC) has notified controlled delivery regulation, which allows customs officials to install tracking devices to monitor the movement of "suspect" consignment.

    The new regulation, aimed at curbing smuggling, has included gold and silvers, narcotic drug and psychotropic substances, precious and semi-precious stones, liquor; currency; cigarettes, tobacco; wildlife products and antiques in its list.

    This will allow a customs officer at the ports to earmark both export and import consignments for controlled delivery on "reasonable belief" that it is "suspect" and can monitor the movement.
    The notification says that if a proper officer having a reasonable belief, that a suspect consignment, is being imported into or exported out of India, in the form of the baggage or otherwise, shall file a report in FORM-I proposing to undertake controlled delivery of such consignment.

    The report has to be approved and authorised by the specified officer, which will be principal additional director general or Additional Director general of Directorate General of Revenue Intelligence (DGRI).

    As per the notification, the customs officer must seek approval as soon as possible, but no later than 72 hours after making the controlled delivery, if the officer is unable to get it before doing so.

  • Jul 09, 2022
  • Finance Ministry pegs dollar value at Rs 79.90 for computing import duty

    The Finance Ministry Thursday pegged the exchange rate for dollar at Rs 79.90 for calculation of import duty with effect from July 8, as against Rs 78.95 a fortnight ago. The sharp revision is due to depreciation of rupee against dollar following outflow of capital caused by various external factors, including the hardening of interest rate globally.

    Similarly, in case of pound sterling, the value has been fixed at Rs 96.10 as compared to Rs 96.70 earlier, according to a finance ministry statement.

    As regards euro, the conversion rate for calculating taxes on imported goods has been fixed at Rs 82.15 as compared to Rs 83.10 on June 16, it said.

    The sharp revision in exchange rates comes in the backdrop of the rupee depreciating by 4.1 per cent against the US dollar during the current financial year so far (up to July 5). However, it is modest relative to other EMEs and even major advanced economies.

  • Feb 03, 2022
  • Explained: Import duty changes in Budget 2022, and its significance

    Signalling a move to protect domestic industries which are not necessarily capital, technology or labour intensive, Finance Minister Nirmala Sitharaman on Tuesday introduced a slew of higher custom duties on items of daily use such as umbrellas, headphones, earphones, loudspeakers, smart meters, and imitation jewelry.

    Who do the duty changes help and what do they signify?
    Most of these products are imported from China, either as complete units or as knocked down units which are then assembled in factories in India. For example, the customs duty on umbrellas was doubled to 20 per cent, while exemptions provided on import of parts of umbrellas were withdrawn. Similarly, the customs duty on single or multiple loudspeakers, whether or not mounted in their enclosures was hiked to 20 per cent from 15 per cent.

  • Feb 03, 2022
  • Customs duty exemptions on 350 items withdrawn to push 'Make in India'

    As many as 350 customs duty exemptions have been withdrawn in the Budget 2022-23 to boost domestic manufacturing. A comprehensive review of customs duty exemption on capital goods and project imports undertaken and more than 40 customs exemptions to be gradually phased out, the Central Board of Indirect Taxes and Customs (CBIC) tweeted.

    In total, 350 customs exemptions are being withdrawn, the CBIC said.

    The Budget tabled in Parliament on February 1 had rationalised customs duty rate on a host of goods.

    Duty on capital goods and project imports was rationalised by phasing out concessional rates and applying a moderate tariff of 7.5 per cent.

    However, exemptions for advanced machineries that are not manufactured within the country will continue.

  • Jan 20, 2022
  • Importers of denatured ethyl alcohol drag government to court over GST classification issue

    Importers of denatured ethyl alcohol, a raw material used in hand sanitisers and disinfectants, and a constituent used in Remdesivir, have approached the Bombay High Court after the customs department initiated investigations into the classification of imported products.

    Hearing the writ petition filed by one of the companies, Satyam Petrochemicals, the court asked the customs department to give at least a week’s notice before taking any "coercive steps".

    The importers had claimed that the customs department had conducted seizures that could have impacted their supply and created a shortage of the raw material.

  • Dec 27, 2021
  • India imposes antidumping duty on 5 Chinese goods for 5 years

    India has imposed antidumping duties on five Chinese products, including certain aluminium goods and some chemicals, for five years to guard local manufacturers from cheap imports from the neighbouring country. According to separate notifications of the Central Board of Indirect Taxes and Customs (CBIC), the duties have been imposed on certain flat rolled products of aluminium; sodium hydrosulphite (used on dye industry); silicone sealant (used in manufacturing of solar photovoltaic modules, and thermal power applications); hydrofluorocarbon (HFC) component R-32; and hydrofluorocarbon blends (both have uses in refrigeration industry).

    These duties were imposed following recommendations of the commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR).

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