TIOL-DDT 2961
01 11 2016
Tuesday

THE Central Government yesterday revised the All Industry Rates (AIRs) of Drawback by Notification No. 131/2016-Customs (N.T.) dated 31.10.2016 which comes into force on 15.11.2016.

These AIRs take into account relevant broad average parameters including,

1. prevailing prices of inputs,

2. input output norms,

3. share of imports in input consumption,

4. the rates of central excise and customs duties,

5. incidence of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods,

6. incidence of duty on HSD/furnace oil,

7. value of export goods, etc.

Some of the changes are: -

 i. AIRs have been provided to certain worked articles under chapters 45, 46 and 68;

ii. Certain products, earlier with all customs AIRs, have been provided composite rates. These include rubber parts (for automobile or other machinery) of chapter 40 and children's picture, drawing/colouring books, etc. of chapter 49;

 iii. Changes in certain tariff items description have been made for dispute prevention or enhancing simplification. These relate, inter-alia, to packaged rice, rubber parts, certain leather items, leggings, frocks, bicycles, protective sports gear, etc;

 iv. For better product differentiation, separate tariff lines have been provided by carving out from (or replacing) certain existing tariff items. These include surimi fish paste (chapter 16), belts (chapter 39), leather woven/braided hand-bag (chapter 42);

 v. In the notes and conditions of the notification, the term article of leather in chapter 42 of the Drawback Schedule has been expanded to include any article wherein 60% or more of the outer and inner surface area taken together is of leather. This is in the light of newer design and commercial practices;

 vi. Residuary rate (customs) provided to items across various chapters has been reduced from 1.9% to 1.5% and from 1.4% to 1.1%.

The Notification also specifies:

1. The alternative AIRs on garment exports made against the Special Advance Authorization (para 4.04A of FTP 2015-20) in discharge of export obligations in terms of Notification No. 45/2016-Customs dated 13.8.2016. For claiming these alternative AIRs, the relevant tariff item has to be suffixed with suffix "C" or suffix "D" for the situation when Cenvat facility has not been availed or when Cenvat facility has been availed, respectively, instead of the usual suffix "A" or suffix "B".

2. The amount for payment as provisional drawback by proper officer of Customs in terms of sub-rule (3) of Rule 7 of Customs, Central Excise and Service Tax Drawback Rules, 1995. This is equivalent to the Customs component of AIR corresponding to the export goods, if applicable, and subject to the same conditions as applicable to a claim for that component.

Apart from revisions in the AIRs, the Government has also amended the Customs, Central Excise and Service Tax Drawback Rules, 1995 by Notification No. 132/2016-Customs (NT) dated 31.10.2016 for the purpose of deleting sub-rule (1) of rule 8 which did not allow AIR or Brand Rate drawback to exports (other than postal exports or exports under advance authorization) if the amount of drawback is less than 1% of F.O.B. value of export, except where the amount of drawback per shipment exceeded Rs.500. This deletion takes effect from 15.11.2016.

The CBEC expects the Commissioners to ensure:

1. due diligence to prevent any misuse.

2. that the shipping bills with parameters considered to be sensitive to be handled with adequate care at the time of export.

3. that in case of claim of the composite (higher) rate of AIR, the processing should specifically ensure availability of "Non-availment of Cenvat certificate" etc. at the export stage itself.

4. that in the case of AIR claim against tariff item numbers 711301, 711302 or 711401 the availability of exporter's declaration as per Circular No.30/2016-Customs and recorded at the Let Export Order stage by the Customs officer.

5. continued scrutiny for preventing any excess drawback arising from mismatch of declarations made in the Item Details and the Drawback Details in a shipping bill.

6. that exporters do not avail of the refund of service tax paid on taxable services which are used as input services in the manufacturing or processing of export goods through any other mechanism while claiming AIR.

7. that suitable public notice and standing order are issued for guidance of the trade and officers.

8. that any inconsistency, error or difficulty faced are intimated to the Board.

9. They inform, with appropriate data, the details of specific products where drawback cap needs to be imposed

With trade facilitation in view, tenure of the Drawback Committee constituted by the Central Government has been extended to expeditiously look into issues arising from the changes made. Accordingly, exporters of products at revised residuary rates of 1.1% and 1.5% may immediately come forward with data, if any, for higher than residuary rates.

CBEC Circular No. 50/2016-Customs., Dated: October 31, 2016

Never had the privilege to be in a Court - PM Modi

ADDRESSING the Golden Jubilee Celebrations of Delhi High Court yesterday, the Prime Minister said,

I never had the privilege to go to a court but I have heard that the atmosphere there is solemn. Perhaps its influence is seen here too. We are celebrating the golden jubilee. Smile a little. I understand the solemnity on the dais so that no wrong perception is created. But here (among audience), I don't think there is any problem.

The Prime Minister referred to the contribution of several people in the last fifty years like the ones who used to do typing under the trees; or those who sat on the dais and dispensed justice or even those who supplied tea in the premises.

The Prime Minister said, "we take up most of the time of the judiciary - we means not Modi, but Government - Government is the biggest litigant." He told the babus "if a teacher goes to court and gets justice, give that benefit to ten thousand other teachers." The Prime Minister wondered why it is not done.

Undue Harassment in the Garb of Public Revenue

IN a recent Judgement, the Allahabad High Court observed,

Aforesaid attitude on the part of respondents is clearly arbitrary and shows an attitude of undue harassment to petitioner in the garb of public Revenue. Interest of public revenue does not authorize Revenue Authorities to work without any authority and create or cause all kinds of harassment to innocent people on the pretext of statutory authority. Revenue Authorities cannot claim liberty/privilege so as to deprive an individual, his property and that too in a manner, which has been found quite unreasonable and wholly without jurisdiction.

Respondents are directed to release all FDRs seized during seizure and also refund the amount in question, if not already released or refunded. In case FDRs and amount in question are not returned or refunded so far, they shall be returned / refunded forthwith without any further delay alongwith interest @ 18% per annum from the date of seizure till the date of actual return / refund.

Respondents shall be at liberty to recover the said amount of interest from the official(s) concerned who is/are found responsible for such negligence and illegal act, after making enquiry as permissible under law.

Petitioner shall also be entitled to cost which we quantify to Rs.25,000/-.

Please see 2016-TIOL-2615-HC-ALL-IT

GSTN to Borrow 800 Crores

THE GSTN, which will run the GST in India is to borrow Rs. 800 Crore to fund infrastructure cost. The total authorised and paid-up capital of GSTN is Rs. 10 Crore. And they may need about Rs. 1500 Crore to put GST in place. And CBEC has a Systems Directorate which is GST ready!

Slight Increase in Tariff Value of Gold, Silver

GOVERNMENT has marginally increased the tariff value of gold and silver.Palm Oil sees an increase while there is a reduction for brass scrap.

Until Tomorrow with more DDT

Have a nice day.

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