2. CUSTOMS

NOTE ON AMENDMENTS

PEAK RATE OF AD VALOREM CUSTOMS DUTY REDUCED:

The peak rate of customs duty on non-agricultural products has been reduced from 15% to 12.5% with a few exceptions.

CVD LEVIED ON ALL IMPORTS EXCEPT FEW EXCEPTIONS

The CVD under Section 3(5) of the Customs Tariff Act which was introduced last year on ITA items has now been extended to all goods with few exceptions. This CVD is levied to compensate the incidence of VAT / Sales tax on such items on the local manufacturer.

The CENVAT Credit is available for such CVD under Rule 3 of the CENVAT Credit Rules. It is important to note that although this CVD is levied in lieu of VAT/Sales tax the credit is available under Central Excise and not VAT. This will affect the importer if he is not an eligible manufacturer or a registered dealer of Central excise as no set-off will be available to him either under Central Excise or VAT/Sales tax.

The following table capitulates the calculation for custom duty:

Sr.	Nature of duty	Duty payable	Duty payable
No.		prior to	after
		28th February 2006	1st March 2006
a)	CIF Value	Rs. 100	Rs. 100
b)	Basic custom duty % of (a)	Rs. 15	Rs. 12.5
	Sub Total (a+b)	Rs. 115	Rs. 112.5
c)	CVD @16.32% (including education cess) on (a+b)	Rs. 1877%	Rs. 18.36
	Subtotal (a+b+c)	Rs. 13377%	Rs. 130.86
d)	Custom Cess 2% on (b+c)	Rs. 68%	Rs. 0.62
	Total	Rs. 13445%	Rs. 131.48
e)	CVD @ 4% (b+c+d)	Nil	Rs. 5.26
	Total	Rs. 13445%	Rs. 136.74

Pharmaceutical Industry

The customs duty on 14 specified anti-cancer and 10 specified Anti-AIDS drugs, and bulk drugs for their manufacture, has been reduced to 5% with Nil CVD by way of excise duty exemption.

The customs duty has been reduced to 5% on specified drugs and bulk drugs for their manufacture. These drugs will be exempt from CV duty also by way of excise duty exemption.

113. Didanosine;
114. Efavirenz;
115. Indinavir;
116. Nelfinavir;
117. Nevirapine;
118. Stavudine;
119. Abacavir Sulphate;
120. Lopinavir;
121. Tenofovir Disoproxil;
122. Emtricitabine;
123. Azathioprine ;
124. Antinomycin D;
125. Cisplatin;
126. Cytosine Arabinoside (Cytarabine);
127. Danazol;
128. Doxorubicin;
129. Etoposide;
130. Flutamide;
131. Ondansetron;;
132. Paclitaxel;
133. Tamoxifen Citrate;
134. Vinblastine Sulphate;
135. Vincristine;
136. Eurocollins Solution;
137. Everolinus tablets/dispersible tablets;
138. Poractant alfa;
139. Exemestane;
140. Recombinant Human Interferon beta 1-a;
141. Troponin-I whole blood test kit;
142. Blower/mister kit for beating heart surgery;
143. Fluoro Enzyme Immunoassay Diagnostic kits.";

Textiles Industry

The Ad valorem component of customs duty on textiles fabrics and garments has been reduced from 15% to 12.5%. There is, however, no change in specific component of customs duty.

The customs duty on man made fibres, filaments yarns and spun yarns has been reduced from 15% to 10%;

The customs duty on DMT, PTA, MEG and Caprolactum has been reduced from 15% to 10%;

The customs duty on Paraxylene has been reduced from 5% to 2%;

The customs duty on specified textile machinery, and parts for manufacture of such machinery, has been reduced from 15% to 10%.

Information Technology

The customs duty on Set Top Boxes, whether or not covered under ITA (Information Technology Agreement), has been unified at Nil customs duty plus 16% CV duty plus 4% special additional duty of customs;

The CVD under Section 3(3) of the Customs Tariff Act has been withdrawn on computers consequent to imposition of excise duty at 12% on computers.

The customs duty on MP3 Players and MPEG4 Players has been reduced from 15% to 5%.

Project Imports