BUDGET ANALYSIS

2015 - 2016
- Aniket Rastogi
Advocate

LEASHING BLACK
MONEY

BLACK MONEY- COMPLIANCE FACILITATION

Definition of proceeds of crime under Prevention of Money-laundering Act, 2002 being
amended to enable attachment and confiscation of equivalent asset in India where the asset
located abroad cannot be forfeited
Quoting of PAN being made mandatory for any purchase/ sale exceeding the value of Rs. 1 lakh
Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even
if there is no taxable income
Date of opening of foreign account to be specified by the assessee in the return of income
Regarding transactions in immovable properties, Section 269SS and Section 269T amended to
prohibit acceptance or re-payment of cash advance of Rs. 20,000 or more otherwise than by
account payee cheque or bank draft or by Electronic Clearance System
Foreign Exchange Management Act, 1999 to be amended to include seizure and confiscation of
asset/security of equivalent value situated in India if any foreign exchange, foreign security or
any immovable property is illegally held outside India

BLACK MONEY- COMPLIANCE FACILITATION

Benami Transaction (Prohibition) Bill to be introduced that will enable confiscation of benami
property and provide for prosecution
Offenders will not permitted to approach the Settlement Commission
False Declaration/documents relating to customs to be predicate offence under Prevention of
Money Laundering Act, 2002
Information regarding foreign currency sales and cross border transactions to be furnished by
third party reporting entities
CBDT and CBEC will leverage technology in order to have access to information in each others
database
Provision being introduced to tackle splitting of reportable transactions

BLACK MONEY - PENALTY

Income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset
to be taxable at the maximum marginal rate. No exemptions or deductions be allowed
Offence will be made non-compoundable
Rigorous imprisonment of upto 10 years
Penalty @ 300% of tax, shall be levied for concealment of income and assets
Penalty of an equal amount is proposed for transaction in immovable property if done in cash
advance of Rs. 20000 or more
Non filing or inadequate filing of return to attract rigorous imprisonment up to 7 years
Penalty and prosecution with punishment of imprisonment up to 5 years if any foreign exchange,
foreign security or any immovable property is illegally held outside India

CHANGES IN DIRECT
TAX

DIRECT TAX
No change in the rate of personal income-tax and the rate of tax for companies in respect of
income earned in the financial year 2015-16
Income tax on royalty and fees for technical services proposed to be reduced from 25% to 10%
Ceiling on receipts from charitable activities be modified to 20% of the total receipts from the
existing ceiling of Rs. 25 lakh
Yoga proposed to be included within the ambit of charitable purpose under Section 2(15) of the
Income-tax Act
Direct Tax Code scrapped
Non-furnishing of Form 15CA and Form 15CB will attract a penalty of Rs. 1 lakh
Threshold limit on new regular workmen has been reduced from 100 to 50 to claim the incentive
under Section 80JJAA

DIRECT TAX
Tax rate on payment of royalty and FTS to a non-resident which is not effectively connected with
PE of such non-resident is now reduced to 10% from 25%
Mere presence of fund manager in India would not establish Permanent Establishment of off
shore funds resulting in adverse tax consequences
No MAT on profits corresponding to income from capital gains on transactions in securities
which are liable to tax at a lower rate
No MAT on share of income received by a Company-member from AOP/ BOI if such AOP/BOI
is chargeable to tax at maximum marginal rate
GAAR deferred for another 2 years. When implemented, it would apply prospectively
investments made on or after 01.04.2017

to

Corporate Tax rate proposed to be reduced from 30% to 25% over the next 4 years. Various tax
exemptions and incentives enjoyed by the Corporate tax payers will be removed

DIRECT TAX
Wealth tax proposed to be abolished w.e.f April 1, 2016 with an additional surcharge of 2% to be
levied thus bringing the surcharge rate to 12% in case of individuals, HUFs, AOPs, BOIs,
artificial juridical persons, firms, cooperative societies and local authorities having income in
excess of Rs. 1 crore, 7% in case of domestic companies, enhanced from 5%, having income
between Rs. 1 crore and Rs. 10 crores and 12% in case of companies having income above Rs. 10
crores, enhanced from 10%
Income tax return structure to be amended to allow capturing of information regarding wealth
held by individuals and entities
Surcharge @12% to be levied as against current rate of 10% on additional income-tax payable by
companies on distribution of dividends and buyback of shares, or by mutual funds and
securitisation trusts on distribution of income
Additional depreciation @20% allowed on new plant and machinery installed by a
manufacturing unit or a unit engaged in generation and distribution of power

DIRECT TAX
Additional investment allowance @15% and additional depreciation @15% proposed to be
provided to new manufacturing units set-up during the period 01.04.2015 to 31.03.2020 in
notified areas of Andhra Pradesh and Telangana
Period of applicability of reduced rate of tax @5% in respect of foreign investors extended from
31.05.2015 to 30.06.2017
In case of foreign companies the surcharge will continue to be levied @2% if the income lies
between Rs. 1 crore and Rs. 10 crore, and @ 5% if the income exceeds Rs. 10 crore
Income of Core Settlement Guarantee Fund established by Clearing Corporations as per mandate
of SEBI exempted

DIRECT TAX (TAXING INDIRECT TRANSFERS)

The term substantially in explanation 5 to Section 9(1)(i) was inserted vide amendment to
Finance Act, 2012 with retrospective effect to provide that the indirect transfer shall also be
chargeable to tax
The amended legislation proceeded to tax even those transactions which although involve
transfer of shares or interest in a foreign entity, but such share or interest derives its value
substantially from the assets based in India
Thus, vide Finance Act, 2015 the term has been clarified to remove the ambiguity regarding the
the undefined criteria upon which such an indirect transfer becomes taxable in India thereby
putting to rest the controversy and providing a stable taxation regime. With respect to taxing
indirect transfers, it has been proposed that value of assets situated in India shall exceed Rs. 10
crore and should comprise of at least 50% of the value of total assets of the company as on the
valuation date

DIRECT TAX (TDS PROVISIONS)

TDS provisions attracted when payment of interest made by co-operative banks to its members
Restrict exemption to TDS under sec. 194C to contractors where such contractor owns ten or less
goods carriages at any time during the previous year along with PAN
TDS on interest paid by a permanent establishment (PE) or a branch of foreign bank to its Head
Office (HO) and other overseas branches treating the PE or branch as a taxable entity
Threshold limit of payment of Rs 30,000 to deduct TDS at 10% on pre-mature withdrawal from
Employees Provident Fund Scheme, 1952

DIRECT TAX (PROCEDURAL ASPECT)

Mechanism proposed to pre-empt repetitive appeals by the revenue in the same assessees case
on the same question of law year after year
No requirement to obtain TAN by an individual or HUF purchasing an immovable property
from a non-resident, when hell deduct tax on such acquisition from a non-resident
In search cases, it is proposed to allow seized cash to be adjusted towards the assessees tax
liability under his settlement application
Increment in monetary limit from Rs. 5 lakh to Rs. 15 lakh, for a case to be heard by a Single
Member Bench of the ITAT
Threshold limit for applicability of transfer pricing regulations to specified domestic transactions
to be increased from Rs. 5 crore to Rs. 20 crore

DIRECT TAX (BENEFITS TO MIDDLE CLASS TAX PAYER)

Investments in Sukanya Samriddhi Scheme is eligible for deduction u/s 80C. All payments to
the beneficiaries including interest payment on deposit will also be fully exempt
Deduction limit u/s 80CCC, on account of contribution to a Pension Fund of LIC or IRDA
approved increased from Rs. 1 lakh to Rs. 1.5 lakh
Additional deduction of Rs. 50,000 is proposed to be provided for contribution to the New
Pension Scheme under Section 80CCD
Deduction limit u/s 80D, in respect of health insurance premium, increased from Rs. 15,000 to
Rs. 25,000 and for senior citizens increased from Rs. 20,000 to Rs. 30,000
Deduction limit u/s 80DD towards maintenance including medical treatment of a dependant
who is a person with disability, increased from Rs. 50,000 to Rs. 75,000 and in case of severe
disability from Rs. 1 lakh to Rs. 1.25 lakh

DIRECT TAX (BENEFITS TO MIDDLE CLASS TAX PAYER)

Deduction limit u/s 80DDB, in respect of expenditure on account of specified diseases of serious
nature increased from Rs. 60,000 to Rs. 80,000 in case of very senior citizens
Donation made to National Fund for Control of Drug Abuse (NFCDA) shall be eligible for 100%
deduction under section 80G
Full deduction proposed against contributions made to Swachh Bharat Kosh and Clean Ganga
Fund under Section 80G
Increase in deduction limit u/s 80U in case of a disabled person from Rs. 50,000 to Rs. 75,000 and
in case of severe disability the limit is increased from Rs. 1 lakh to Rs. 1.25 lakh
Deduction of Rs. 30,000 towards medical expenditures allowed in case of senior citizens above
the age of 80 years and not covered by health insurance
Transport allowance exemption is being increased from Rs. 800 to Rs. 1,600 per month

CHANGES IN INDIRECT
TAX

SERVICE TAX
Increase in rate of service tax plus education cesses from 12.36% to a consolidated rate of 14%.
Effective date yet to be notified
Imposition of Swachh Bharat Cess @2% is proposed to be levied on value of all or certain
taxable services for financing and promoting Swachh Bharat initiative thereby making total rate
of service tax to be 16%. Effective date is yet to be notified
Section 66F (1) prescribes that unless otherwise specified, reference to a service shall not include
reference to any input service used for providing such services
Exemption vide notification 42/2012, regarding service provided by a commission agent located
outside India to an exporter located in India, is withdrawn
Transport of goods for export by road from the factory to a land customs station is exempted
Road cess on petrol and diesel hiked to Rs. 6 per litre from Rs. 2 per litre

SERVICE TAX
Service tax levied on construction related services rendered to Government, local authority or
governmental authority with exemption limited to specified works
Negative List under service tax is being slightly pruned and certain other exemptions are being
withdrawn to widen the tax base

SERVICE TAX (DEFINITION OF CONSIDERATION)

Consideration under section 67 includes :
any amount that is payable for the taxable services provided or to be provided
any reimbursable expenditure or cost incurred by the service provider and charged, in course of
providing or agreeing to provide a taxable service, except in such circumstances, and subject to
such conditions, as may be prescribed
any amount retained by the lottery distributor or selling agent from gross sale amount of lottery
ticket in addition to the fee or commission, if any, or, as the case may be, the discount received,
that is to say, the difference in the face value of lottery ticket and the price at which the
distributor or selling agent gets such ticket

SERVICE TAX (CHANGES IN NEGATIVE LIST)

To be levied on the service provided by way of access to amusement facility such as rides,
bowling alleys, amusement arcades, water parks, theme parks, etc
Service tax on admission to entertainment event of concerts, pageants, non-recognised sporting
events, music concerts and award functions, where amount charged, for admission, is more than
Rs. 500/- except few being exempted
Services provided by the Government or local authority to a business entity, except the services
that are specifically exempted or covered by any another entry in the Negative List, shall be
liable to service tax
Service tax to be levied on service by way of carrying out any processes as job work for
production or manufacture of alcoholic liquor for human consumption

SERVICE TAX (MEGA EXEMPTION NOTI. [25/2012])

Services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of
fruits and vegetables are being exempted
Service provided by way of admission to a museum, zoo, national park, wild life sanctuary and a
tiger reserve is being exempted
No Service tax on services of performing artist (except brand ambassador) in folk or classical art
form of music, dance or theatre if amount charged does not exceed Rs. 1 lakh
Service provided by way of exhibition of movie by the exhibitor/theatre owner to the distributor
or association of persons consisting of exhibitor as one of its member is being exempted
Exemptions withdrawn on the following services:
o services provided by a mutual fund agent to a mutual fund or assets management company;
o distributor to a mutual fund or AMC; and
o selling or marketing agent of lottery ticket to a distributor of lottery

SERVICE TAX (MEGA EXEMPTION NOTI. [25/2012])

Exemption presently available on specified services of construction, repair of civil structures, etc.
when provided to Government shall be restricted only to o a historical monument, archaeological site
o canal, dam or other irrigation work;
o pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal

Service tax levied on construction, erection, commission or installation of original works related
to airport or port
Health care services and ambulance services are exempt from Service Tax
Life insurance service provided by way of Varishtha Pension Bima Yojna is being exempted
No service tax on services provided by a Common Effluent Treatment Plant operator for
treatment of effluent

SERVICE TAX (MEGA EXEMPTION NOTI. [25/2012])

Exemption is being withdrawn on the following serviceso Departmentally run public telephone
o Guaranteed public telephone operating only local calls
o Service by way of making telephone calls from free telephone at airport and hospital where no bill is
issued

Service tax levied on transportation of tea, coffee, jaggery, sugar, milk products (other than milk)
and edible oil
Service tax exemption on transportation of food stuff by rail, or vessels or road will be limited to
transportation of food grains including rice and pulses, flours, milk and salt only

SERVICE TAX (ABATEMENT)

Service tax payable on 30% on value of transport of passengers, with or without accompanied
belongings by rail is also subject to uniform condition of non-availment of Cenvat credit
Abatement on services by goods transport agency in relation to transportation of goods is
increased from 25% to 30%
Abatement on services by transport of goods in a vessel is reduced to 30%
Abatement of 70% is withdrawn on chit fund service
Business and first class air travel to cost more on pocket since abatement is reduced from 60% to
40%

SERVICE TAX (REVERSE CHARGE)

Full reverse charge on services provided by mutual fund agents or distributors, mutual fund
or asset management company and lottery agents
Full reverse charge on manpower supply and security services when provided by
individual, HUF, partnership firm to a body corporate
Full reverse charge on service provided or agreed to be provided by a person involving an
aggregator in any manner

SERVICE TAX (SERVICE TAX RULES)

Under Rule 2, services provided by way of aggregator model to be taxed, if the service, so
provided, uses the brand name of the aggregator in any manner
Under Rule 4, registration for single premises to be granted in two days of filing of application.
Also, there is no need to get Registration Certificate signed by the Authority and the Registration
Certificate downloaded from ACES would be sufficient proof
Provision for issuing digitally signed invoices is inserted. Also, records may be preserved in
electronic form but each page has to be authenticated by means of a digital signature
Rule 6 (6A) which provided for recovery of service tax self-assessed and declared in the return
under section 87 is being omitted consequent to the amendment in section 73 for enabling such
recovery
Alternative rates in respect of certain services like money changing service, service provided by
air travel agent, insurance service and service provided by lottery distributor and selling agent
are revised proportionately due to upward revision of service tax rate

SERVICE TAX (CENVAT CREDIT RULES)

Cenvat Credit Rules amended to allow credit of service tax paid under partial reverse charge by
the service receiver without linking it to the payments of value of service to service provider as a
trade facilitation measure
Cenvat credit (in partial reverse charge) can be availed by the service recipient as under:
o Where service recipient has to pay the tax on his own accord- credit can be claimed when the same is
deposited with the Government
o Where tax is charged by the service provider- credit can be claimed as soon as the invoice is received by
the service recipient. Provided, the payment is made within three months of receipt of invoice else the
credit, so availed, shall be revered but can be re-availed on making payment

Time period for taking Cenvat Credit is extended from six months to one year from date of
invoice
Cenvat Credit allowed on input and capital goods received directly by job workers

CUSTOMS
Concessional rate of custom duty of Nil Basic Customs Duty, 6% CVD and Nil SAD on specified
parts of electrically operated and hybrid vehicles extended upto 31st March, 2016
Reduction in the rates of basic customs duty on certain inputs, raw materials, intermediates and
components (in all 22 items) so as to minimise the impact of duty inversion and reduce the
manufacturing cost in several sectors
Addressing the problem of Cenvat credit accumulation due to the levy of SAD, certain goods,
except populated printed circuit are exempted from SAD. Also, the rate of SAD on certain other
inputs and raw materials are reduced, subject to actual user condition
Notifications 13/2012 and 14/2012 granting exemption on the levy of EC and SHEC are
rescinded
Export duty on ilmenite reduced to 2.5% from 5%

CUSTOMS
Petrol and high speed diesel, falling under heading 2710 of the First Schedule to the Customs
Tariff Act, 1975, when imported into India, exempted from so much of the additional customs
duty as is in excess of the amount calculated at the rate of Rs. 6 per litre
No penalty would be imposed if the duty and interest, due, is paid within 30 days of issue of
Show Cause Notice, provided there is no fraud , collusion, mis-representation involved
Reduced penalty of 25% in cases of short levy/ non-levy/ short payment/ non-payment/
erroneous refund of duty for reasons of collusion or any wilful mis-statement or suppression of
facts, provided the duty, as determined, along with the interest is paid within 30 days from the
date of communication of the order
Penalty not exceeding 10% of the duty sought to be evaded of Rs. 5000, whichever is greater, in
cases of improper import or export of goods

CUSTOMS (REDUCTION IN BCD)

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Antimony metal, antimony waste and scrap

5.0%

2.5%

- 2.5%

Black Light Unit Module for use in the manufacture of

LCD/LED TV panels

10.0%

Nil

- 10.0%

Butyl acrylate

7.5%

5.0%

- 2.5%

Certain specified inputs for use in the manufacture of

flexible medical video endoscopes

5.0%

2.5%

- 2.5%

Ethylene dichloride (EDC), vinyl chloride monomer

(VCM) and styrene monomer (SM)

2.5%

2.0%

- 0.5%

HDPE for use in the manufacture of telecommunication

grade optical fibre cables

7.5%

Nil

- 7.5%

RAW MATERIALS

CUSTOMS (REDUCTION IN BCD)- CONTD.

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Isoprene and Liquefied butanes

5.0%

2.5%

- 2.5%

Organic LED (OLED) TV panels along with LCDs panels

10.0%

Nil

- 10.0%

Specified components for use in the manufacture of

specified CNC lathe machines and machining centres

7.5%

2.5%

- 5.0%

Ulexite ore

2.5%

Nil

-2.5%

5.0%

Nil

- 5.0%

RAW MATERIALS

Digital Still
components

Image

Video

Camera,

their

parts

and

CUSTOMS (REDUCTION IN BCD)

To reduce the cost of raw materials, basic custom duty on certain items has been reduced as
given hereunder:
RAW MATERIALS

CURRENT
RATE

Active Energy Controller (AEC) for use in the manufacture of Renewable Power
System (RPS) Inverters

5.0%

Evacuated Tubes with three layers of solar selective coating for use in the
manufacture of solar water heater and system

Nil

Parts, components and accessories (falling under any Chapter) for use in the
manufacture of tablet computers and their sub-parts

Nil

Raw materials [battery, titanium, palladium wire, eutectic wire, silicone resins and
rubbers, solder paste, reed switch, diodes, transistors, capacitors, controllers, coils
(steel), tubing (silicone)] for use in the manufacture of pacemakers

Nil

CUSTOMS (REDUCTION IN BCD)

To address the problem of duty inversion, duty has been reduced on certain inputs as listed
below:
RAW MATERIALS

CURRENT
RATE

Duty on certain materials (C-block compressors, crankshafts, over load protector and
positive thermal coefficient) used to manufacture refrigerator compressors

5.0%

Certain compounds of ceria zirconia, cerium and zeolite used in the manufacture of
wash-coat for catalytic converters

5.0%

Sulphuric acid for the manufacture of fertilizers

5.0%

Anthraquinone

2.5%

Metal parts for use in the manufacture of electrical insulators falling under heading
8546

7.5%

CUSTOMS (REDUCTION IN BCD)- CONTD.

RAW MATERIALS

CURRENT
RATE

Magnetron of up to 1 KW used for the manufacture of domestic microwave ovens

Nil

Artificial heart (left ventricular assist device)

Nil

Materials like water blocking tape, Ethylene propylene non-conjugated diene

rubber (EPDM) and mica glass tape used in the manufacture of insulated wires and
cables

7.5%

CUSTOMS (REDUCTION IN SAD)

SAD on certain raw materials has been reduced to address the problem of CENVAT credit
accumulation. The new applicable rates are as listed in the table below
RAW MATERIALS

PREVIOUS
RATE

CURRENT
RATE

CHANGE

All goods except populated PCBs (under any Chapter of

Customs Tariff) used in manufacture of ITA bound goods

4.0%

Nil

- 4.0%

Inputs for use in the manufacture of LED drivers and

MCPCB for LED lights, fixtures and LED lamps

4.0%

Nil

- 4.0%

Melting scrap of iron & steel, copper, brass and

aluminium

4.0%

2.0%

- 2.0%

Naphtha, ethylene dichloride (EDC), vinyl chloride

monomer (VCM) and styrene monomer (SM) for
manufacture of excisable goods

4.0%

2.0%

- 2.0%

CUSTOMS (REDUCTION IN SAD)- CONTD.

RAW MATERIALS

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Raw materials [battery, titanium, palladium wire, eutectic

wire, silicone resins and rubbers, solder paste, reed
switch, diodes, transistors, capacitors, controllers, coils
(steel), tubing (silicone)] for use in the manufacture of
pacemakers

4.0%

Nil

- 4.0%

Parts, components and accessories (falling under any

Chapter) for use in the manufacture of tablet computers

4.0%

Nil

- 4.0%

CUSTOMS (INCREASE IN BCD)

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Effective rate on Commercial Vehicles

10.0%

20.0%

10.0%

Metallurgical coke

2.5%

5.0%

2.5%

Tariff rate on Commercial Vehicles

10.0%

40.0%

30.0%

Tariff rate on iron & steel and articles of iron or steel,

falling under Chapters 72 and 73 of the Customs Tariff

10.0%

15.0%

5.0%

RAW MATERIALS

Note:

There is no change in the existing effective rates of basic customs duty on Iron and Steel

Customs duty on commercial vehicles in Completely Knocked Down (CKD) kits and electrically operated vehicles
including those in CKD condition will continue to be at 10%

EXCISE
Standard Ad Valorem rate of BED proposed to be increased to 12.5%. Levy of Education Cess
and Secondary & Higher Education Cess on excisable goods are being subsumed in Basic Excise
Duty thereby making the excisable goods fully exempt of both the cess
Education Cess and Higher Education Cess on petroleum products exempted
Concessional excise duty rates on specified parts of Electrically Operated Vehicles and Hybrid
Vehicles, presently available upto 31.03.2015, is being extended upto 31.03.2016
All goods falling within the First Schedule to the Central Excise Tariff Act, 1985 exempted from
the whole of the Secondary and Higher Education Cess
Notifications 28/2010 and 29/2010 granting Education Cess and Secondary and Higher
Education Cess exemption on all goods under tenth schedule of Finance Act, 2010 have been
withdrawn
Exemption from SAD proposed on all goods used for manufacture of ITA bound (except PPCB)

EXCISE
Scheduled rate of Clean Energy Cess levied on coal, lignite and peat is being increased from Rs.
100 per tonne to Rs. 300 per tonne
Clean Energy Cess increased from Rs. 100 to Rs. 200 per metric tonne of coal
Conversion of Excise Duty to the extent of Rs. 4 per litre into Road Cess
Excise duty levied on the value of duty paid on rails for manufacture of railway or tramway
track construction material is being exempted retrospectively for the period from 17.03.2012 to
02.02.2014, if no CENVAT credit of duty paid on such rails is availed
Lemonade and other beverages to attract excise duty based on MRP
Condensed milk in unit containers will attract excise duty based on retail sale price
LED lights will attract excise duty based on MRP

EXCISE
Excise duty on cigarettes is increased by 25% for cigarettes of length not exceeding 65 mm and by
15% for cigarettes of other lengths. Similar increases proposed on cigars, cheroots and cigarillos
Increase in excise duty on pan masala, gutkha and certain other tobacco products
Excise duty rate on petrol and diesel revised but net effect remains unchanged
Excise duty exemption for captively consumed intermediate compound coming into existence
during the manufacture of agarbatti
Excise duty of 2% without CENVAT credit and 6% with CENVAT credit to be levied on peanut
butter
Excise duty of 2% without CENVAT credit or 6% with CENVAT credit is being levied on
condensed milk put up in unit containers
Additional Excise duty on water (mineral, aerated, sweetened or flavoured) reduced to Nil

EXCISE (AMENDMENT IN CENVAT CREDIT RULES)

Time limit for taking CENVAT Credit on inputs and input services is being increased from six
months to one year
Credit in respect of inputs may be taken immediately on receipt of the inputs at the premises of
the job worker when goods directly sent to him
If credit wrongly taken but not utilized no interest or penalty attracted and it would be recovered
from the manufacturer. If credit wrongly taken and utilized then it would be recovered along
with interest
Credit shall be utilised in the following manner:
o the opening balance of the month has been utilised first;
o credit admissible in terms of these rules taken during the month has been utilised next;
o credit inadmissible in terms of these rules taken during the month has been utilised thereafter

EXCISE (CHANGES IN ABATEMENT)

RAW MATERIALS

CURRENT
RATE

Condensed milk put up in unit containers

30%

Extracts, essences and concentrates of tea or mate and preparations with a basis of
these extracts, essences or concentrates or with a basis of tea or mate

30%

All goods except mineral waters and aerated waters

35%

All footwear

25%

LED lights or fixtures including LED Lamps

35%

EXCISE (REDUCTION IN EXCISE DUTY)

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Chassis for Ambulances

24.0%

12.5%

- 11.5%

Inputs used in manufacture of LED drivers and MCPCB

for LED lights, fixtures and LED lamps

12.0%

6.0%

- 6.0%

Leather footwear (footwear with uppers made of leather

of heading 4107 or 4112 to 4114) of Retail Sale Price of
more than Rs. 1000 per pair

12.0%

6.0%

- 6.0%

Tablets without Cenvat Credit

12.0%

2.0%

- 10.0%

Solar water heater and system without Cenvat Credit

12.0%

Nil

- 12.0%

RAW MATERIALS

EXCISE (REDUCTION IN EXCISE DUTY)

RAW MATERIALS

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Pig iron SG Grade/ Ferro-silicon-magnesium for

manufacture of cast components of wind operated
electricity generators

12.0%

Nil

- 12.0%

Round copper wire and tin alloys used in manufacture of

Solar PV ribbon for manufacture of solar PV cells

12.0%

Nil

- 12.0%

Specified raw materials [battery, titanium, palladium wire

etc.] for use in the manufacture of pacemakers

12.0%

Nil

- 12.0%

Wafers for use in the manufacture of integrated circuit

(IC) modules for smart cards

12.0%

6.0%

- 6.0%

EXCISE (INCREASE IN AD VALOREM RATES)

RAW MATERIALS

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Duty on tobacco used for smoking through 'hookah' or

'chilam , other unbranded smoking tobacco and other
unbranded manufactured tobacco and its substitutes

12.0%

12.5%

.5%

All goods, manufactured and cleared in packaged form, 6% + Rs 120

from a mini cement plant
PMT

6% + Rs 125
PMT

Rs 5 PMT

All goods, manufactured and cleared in packaged form,

from a plant other than a mini cement plant

12% + Rs
120 PMT

12.5% + Rs
125 PMT

.5% + Rs 5
PMT

All goods, whether or not manufactured in a mini cement

plant, other than those cleared in packaged form

12.0%

12.5%

.5%

EXCISE (INCREASE IN AD VALOREM RATES)

RAW MATERIALS
Cement clinkers and Portland cement
Gold potassium cyanide manufactured from gold and
used in the electronics industry

Supported catalysts of certain metals

PREVIOUS
RATE

CURRENT
RATE

CHANGE

12.0%

12.5%

.5%

12.0%
(excluding
value of
gold)

12.5%
(excluding
value of
gold)

.5%

12.0%

12.5%

(of the value of

material, if any,
added and the
amount charged
for such
manufacture)

(of the value of

material , if any,
added and the
amount charged
for such
manufacture)

.5%

EXCISE (INCREASE IN AD VALOREM RATES)

RAW MATERIALS

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Cotton yarn, man-made synthetic filament yarn and yarn

of staple fibres put up for sale as well as certain fabrics
woven

12.0%

12.5%

.5%

Sacks and bags of polymers of ethylene other than for

industrial use

12.0%

15.0%

3.0%

Drilling rigs falling under heading 8430 and 8705,

mounted on motor vehicle chassis manufactured from
chassis and compressor on which the duty of excise
leviable under the First Schedule has already been paid

12.0%

12.5%

.5%

Hybrid motor vehicles

12.0%

12.5%

.5%

EXCISE (INCREASE IN AD VALOREM RATES)

RAW MATERIALS

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Three wheeled vehicles for transport of not more than

seven persons, including the driver

12.0%

12.5%

.5%

Motor vehicles, other than petrol driven dumpers of tariff

item 8704 10 90

12.0%

12.5%

.5%

Motor vehicles of less than 4000mm in length, driven by

petrol, LPG, CNG or diesel and with engine capacity of
less than 1200cc (Petrol, CNG, LPG) and 1500 cc (Diesel)

12.0%

12.5%

.5%

Hydrogen vehicles (on fuel cell technology) and three or

more axled motor vehicles for transport of goods or for
transport of eight or more persons, including the driver
(other than articulated vehicle)

12.0%

12.5%

.5%

EXCISE (INCREASE IN AD VALOREM RATES)

RAW MATERIALS

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Motor Vehicles for the transport of more than twelve

persons, excluding the driver

12.0%

12.5%

.5%

Motor Vehicles for the transport of goods, other than

petrol driven

12.0%

12.5%

.5%

Motor Vehicle under heading 8716 manufactured by a

manufacturer, other than the manufacturer of the chassis

12.0%

12.5%

.5%

Chassis of battery powered road vehicles and of three or

more axled motor vehicle

12.0%

12.5%

.5%

EXCISE (INCREASE IN EXCISE DUTY)

PREVIOUS
RATE

CURRENT
RATE

CHANGE

Tablets with Cenvat Credit

12.0%

12.5%

.5%

Soft Drinks

12.0%

18.0%

6.0%

Solar water heater and system with Cenvat Credit

12.0%

12.5%

.5%

Mobile Phones with Cenvat Credit

6.0%

12.5%

6.5%

RAW MATERIALS

EXCISE (COMPLIANCE FACILITATION)

PAN requirement mandatory for registration
Details of registrations obtained from other departments to be communicated to the excise
department
Online registration for Central Excise to be done within 2 working days of the receipt of duly
completed online application form
Post registration, self attested documents to be tendered at the time of verification of the
premises
Fresh registration in case of transfer of business or acquisition of factory
Assessee allowed to issue digitally signed invoices and maintain other records electronically
Delay in return filing will attract an interest of Rs. 100 for each day till the default continues

EXCISE (COMPLIANCE FACILITATION)

Facility of direct dispatch of goods by registered dealer from seller to customers premises is
being provided. Similar facility is also being allowed in respect of job-workers. Registered
importer can also send goods directly to customer from the port of importation

IMPACT ON TAX COLLECTION

As a result of these changes the direct tax
proposals are projected to result in revenue
loss of 8,315 crore

23383

On the other hand, the changes in indirect

taxes are expected to yield 23,383 crore
Thus, the net impact of all tax proposals
would be revenue gain of 15,068 crore

-8315

Direct Tax

Indirect Tax

Projected figures for 2015-2016

THANK YOU

Aniket Rastogi, Advocate

M: +91 9899177302, 7417505699
E: aniket.rastogii@gmail.com