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Implications of Budget 2009 in Excise Duty

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Excise Duty
No Change in the mean Cenvat rate of 8% ad valorem.However the concessional excise duty rate of 4% has
been increased to 8% with certain exceptions.
Modification
Basic duty on branded Petrol converted from "6%+Rs.5 per litre" to a specific rate of Rs.6.50 per
litre. Now total duty on branded petrol will be Rs.14.50 per litre.
Basic duty on branded High Speed Diesel converted
from "6%+Rs.1.25 per litre" to a specific rate of Rs.2.75 per litre. Now total duty on branded High
Speed Diesel will be Rs.4.75 per litre.
Duty exemption on recorded smart cards and recorded proximity cards, tags made optional.
Manufacturer may opt to pay duty and avail the credit.
Reduction
High Speed Diesel blended with upto 20% bio-diesel to be fully exempt from excise duties provided
appropriate duties paid on HSD and bio-diesel.
Duty on Special Boiling Point spirits and Naphtha reduced to 14%.
Duty exemption provided to tops (man-made), made out of duty paid man-made tow procured from outside
the factory using 'tow-to-top' process.
Goods manufactured at the site of construction for use in construction work at such site fully exempted.
Duty on articles of jewelry on which the brand name or trade name is indelibly affixed or embossed on the
articles of jewelry itself, reduced from 2% to nil.
Specific component of duty on motor vehicles of heading 8702 / 8703 having engine capacity
exceeding 1999 CC reduced from Rs.20000 per unit to
Rs.15000 per unit.
Duty on petrol driven motor vehicles for transport of goods except dumpers reduced from 20% to 8%.
Duty exempted on specified medical devices namely Patent Ductus Arteriosus/ Atrial Septal Defect
occlusion device.
Exemption provided to packaged software, subject to specified conditions, from so much of the duty of
excise leviable thereon as is equivalent to the excise duty payable on the portion of the value which
represents the consideration paid or payable for transfer of right to use such software.
Increase
Exemption to Naphtha or Natural Gasoline Liquid would not be available if they are used in the
manufacture of fertilizer/ammonia which in turn is used for manufacture of some other item.
Duty on following items increased from 4% to 8%:
Ink used in writing instruments.
Pure terephthalic acid (PTA), dimethyl terephthalate(DMT), acrylonitrile Polyester chips
Heat resistant latex rubber tension thread and Heat resistant rubber tension tape.
Raw, tanned and dressed fur skins.
Goods falling under heading 4408 (sheets for veneering for plywood and related products), 4410
(different kinds of wood boards), 4411 (fibre board of wood or ligneous materials) and 4412 (plywood).
Flush doors and articles of wood other than articles of densified wood.
All goods falling under heading 4820 (folders, file covers and other articles of stationary)
Paper and paperboard labels.
Man made filament yarn falling under heading 5402,5403 and 5406.
Manmade fibres (tow and staple fibres) falling under chapter 5501 to 5507.
All textile goods made of manmade fibre/yarn or natural fibres/yarn other than cotton i.e. beyond the
fibre/yarn stage.
Goods in which not les than 25% by weight of fly ash or phosphogypsum or both have been used.
Articles of mica.
Solid or hollow building blocks, including aerated or cellular light weight concrete blocks and slabs.
Ceramic tiles, manufactured in a factory not using electricity for firing the kiln.
LPG Gas stoves.
Electronic milk tester / solid non-fat (SNF) tester.
MP3/MP4 or MPEG 4 players with or without radio/video reception facility.
Contact lenses.
Parts of drawing and mathematical instruments, used in the manufacture of drawing and mathematical instruments.
Playing cards.
Goods classified under heading 9603 like paint brushes, toothbrushes etc.
Slide fasteners and parts thereof.

Duty on all textile goods made of pure cotton, not containing any other textile material increased from
nil to 4%.
Custom Duty
Modification
Description of some specified machinery items for use in leather or footwear industry has been amended.
Reduction
Duty on unworked corals reduced from 5% to nil.
Duty on rock phosphate reduced from 5% to 2%.
Basic Duty on bio-diesel reduced from 7.5% to 2.5%.
Basic Duty on nine specified life saving drugs and their bulk drugs and one vaccine reduced to 5% with nil
CVD by way of excise exemption.
Basic duty on waste of wool and cotton waste reduced from 15% to 10%.
Concessional duty of 5% on specified plantation machinery available upto 30.04.09 extended upto 06.07.10.
Duty on Permanent magnets for manufacture of PM synchronous generators above 500 KW for use in wind
operated electricity generators reduced from 7.5% to 5%.
Duty on mechanical harvesters for coffee plantation sector reduced from 7.5% to 5%. This exemption valid upto 06.07.2010.
Exemption provided to packaged or canned software, subject to specified conditions, from so much of the
additional duty of customs leviable thereon as is equivalent to the duty payable on the portion of the
value which represents the consideration paid or payable for transfer of right to use such software.
Duty on LCD panels for manufacture of LCD TV reduced from10% to 5%.
Full exemption from special additional duty of customs on parts, components and accessories of mobile
handsets has been reintroduced. This exemption is valid for one year.
Basic custom duty on inflatable rafts fully exempted.
Duty on Artificial Heart (left ventricular assist device) reduced from 7.5% to 5%.
Duty on Patent Ductus Arteriosus/Atrial Septal Defect occlusion device reduced from 7.5% to 5% with nil CVD by way of excise duty exemption.
Duty fully exempted on snow skis and other snow-ski equipment, water-skis, surf boards, sailboards and
other water-sports equipments.
Increase
Basic duty on gold and silver has been increased as follows:

Gold bars from Rs.100 per 10 gm to Rs.200 per 10 gm
Gold in any form other than bars from Rs.250 per 10 grams to Rs.500 per 10 grams.
Silver in any form from Rs.500 per kg. to Rs.1000 per kg.

Exemption of duty on concrete batching plants of capacity 50 cum/hr or more withdrawn. Now these
items will attract 7.5% duty.
Duty on set top boxes increased from nil to 5%.
CVD exemption on Aerial Passenger ropeway projects has been withdrawn.

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