Spreading Plastics Intelligence

Union Budget 2009-10 Highlights

Budget Highlights

Indirect taxes

bull Re-confirmation of implementation of GST by April 1 2010 in keeping with the principles

of Fiscal Federalism under the Constitution dual GST to be implemented

bull 3 new taxable services introduced ndash Legal services inter alia brought under tax net

bull No change in the rate structure of Customs duty Excise duty and Service tax

bull No change in rate of CST

bull Reduction in amount payable under Rule 6(3) of Credit Rules ndash 5 in case of goods 6

in case of services

bull One Advance Ruling Authority for Customs Excise Service tax and Income tax

bull Exemption to exporters from Service tax on GTA Services and Commission paid to

foreign agents ndash Refund scheme being revamped to ensure speedier grant of refunds

Effective Date of various changes

Particulars With effective from

New services and change in existing services From a date to be notified later

Amendments to service tax rules 1994 (Procedural changes)

July 7 2009

Amendments to Cenvat Credit Rules 2004 July 7 2009

Legislative changes in Customs and Excise Date of Presidential assent to the Finance Bill 2009

New rates of Customs duty July 7 2009

New rates of Excise duty July 7 2009

Service Tax - Overview

Source ELP

Key Legislative Changes ndash Service Tax

Notifications under the Act

Notification No172009-ST dt 07th July 2009

bullExemption provided to specified taxable services received by an

exporter of goods and used for export of goods pertaining to

specified services

bullThe present Notification supercedes Notification No412007-ST

dt 6th October 2007

bullServices of terminal handling added to list of services previously

enumerated in Notification No412007-ST

New Provision Amendment

Analysis

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

Exemption to taxable services received by an exporter of goods and

used for export of goods Transport of goods by road from

1048707 Container freight station or

1048707 Inland container depot to port or airport Commission agentbull Located outside India andbull Engaged under a contract or agreement or documentbull To act on behalf of the exporterbull To cause sale of goods exported out of India In case of services provided by the commission agent the exemption is

limited to 1 of the FOB value of the goods exported by the exporter for which the services have been used

Exemption will not be available on export of canalized item project export or export financed by Government of India of EXIM Bank or export made by Indian partner in a company with equity participation in an overseas joint-venture or wholly owned subsidiary

New Provision Amendment

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

bull Taxable services viz transport of goods by road service and business auxiliary services (amounts paid to foreign commission agents) exempted in relation to export of goods from India insofar as exporter is liable to pay Service Tax under the reverse charge mechanism

Analysis

Amendments to the Import Rules

bull The definition of the expression ldquoIndiardquo has been amended to include installationsstructures and vessels in the continental shelf of India and exclusive economic zone of India as a consequence of amendment to Notification No12002-ST by way of Notification No 222009-ST dt 7th July 2009

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Budget Highlights

Indirect taxes

bull Re-confirmation of implementation of GST by April 1 2010 in keeping with the principles

of Fiscal Federalism under the Constitution dual GST to be implemented

bull 3 new taxable services introduced ndash Legal services inter alia brought under tax net

bull No change in the rate structure of Customs duty Excise duty and Service tax

bull No change in rate of CST

bull Reduction in amount payable under Rule 6(3) of Credit Rules ndash 5 in case of goods 6

in case of services

bull One Advance Ruling Authority for Customs Excise Service tax and Income tax

bull Exemption to exporters from Service tax on GTA Services and Commission paid to

foreign agents ndash Refund scheme being revamped to ensure speedier grant of refunds

Effective Date of various changes

Particulars With effective from

New services and change in existing services From a date to be notified later

Amendments to service tax rules 1994 (Procedural changes)

July 7 2009

Amendments to Cenvat Credit Rules 2004 July 7 2009

Legislative changes in Customs and Excise Date of Presidential assent to the Finance Bill 2009

New rates of Customs duty July 7 2009

New rates of Excise duty July 7 2009

Service Tax - Overview

Source ELP

Key Legislative Changes ndash Service Tax

Notifications under the Act

Notification No172009-ST dt 07th July 2009

bullExemption provided to specified taxable services received by an

exporter of goods and used for export of goods pertaining to

specified services

bullThe present Notification supercedes Notification No412007-ST

dt 6th October 2007

bullServices of terminal handling added to list of services previously

enumerated in Notification No412007-ST

New Provision Amendment

Analysis

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

Exemption to taxable services received by an exporter of goods and

used for export of goods Transport of goods by road from

1048707 Container freight station or

1048707 Inland container depot to port or airport Commission agentbull Located outside India andbull Engaged under a contract or agreement or documentbull To act on behalf of the exporterbull To cause sale of goods exported out of India In case of services provided by the commission agent the exemption is

limited to 1 of the FOB value of the goods exported by the exporter for which the services have been used

Exemption will not be available on export of canalized item project export or export financed by Government of India of EXIM Bank or export made by Indian partner in a company with equity participation in an overseas joint-venture or wholly owned subsidiary

New Provision Amendment

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

bull Taxable services viz transport of goods by road service and business auxiliary services (amounts paid to foreign commission agents) exempted in relation to export of goods from India insofar as exporter is liable to pay Service Tax under the reverse charge mechanism

Analysis

Amendments to the Import Rules

bull The definition of the expression ldquoIndiardquo has been amended to include installationsstructures and vessels in the continental shelf of India and exclusive economic zone of India as a consequence of amendment to Notification No12002-ST by way of Notification No 222009-ST dt 7th July 2009

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Effective Date of various changes

Particulars With effective from

New services and change in existing services From a date to be notified later

Amendments to service tax rules 1994 (Procedural changes)

July 7 2009

Amendments to Cenvat Credit Rules 2004 July 7 2009

Legislative changes in Customs and Excise Date of Presidential assent to the Finance Bill 2009

New rates of Customs duty July 7 2009

New rates of Excise duty July 7 2009

Service Tax - Overview

Source ELP

Key Legislative Changes ndash Service Tax

Notifications under the Act

Notification No172009-ST dt 07th July 2009

bullExemption provided to specified taxable services received by an

exporter of goods and used for export of goods pertaining to

specified services

bullThe present Notification supercedes Notification No412007-ST

dt 6th October 2007

bullServices of terminal handling added to list of services previously

enumerated in Notification No412007-ST

New Provision Amendment

Analysis

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

Exemption to taxable services received by an exporter of goods and

used for export of goods Transport of goods by road from

1048707 Container freight station or

1048707 Inland container depot to port or airport Commission agentbull Located outside India andbull Engaged under a contract or agreement or documentbull To act on behalf of the exporterbull To cause sale of goods exported out of India In case of services provided by the commission agent the exemption is

limited to 1 of the FOB value of the goods exported by the exporter for which the services have been used

Exemption will not be available on export of canalized item project export or export financed by Government of India of EXIM Bank or export made by Indian partner in a company with equity participation in an overseas joint-venture or wholly owned subsidiary

New Provision Amendment

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

bull Taxable services viz transport of goods by road service and business auxiliary services (amounts paid to foreign commission agents) exempted in relation to export of goods from India insofar as exporter is liable to pay Service Tax under the reverse charge mechanism

Analysis

Amendments to the Import Rules

bull The definition of the expression ldquoIndiardquo has been amended to include installationsstructures and vessels in the continental shelf of India and exclusive economic zone of India as a consequence of amendment to Notification No12002-ST by way of Notification No 222009-ST dt 7th July 2009

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Service Tax - Overview

Source ELP

Key Legislative Changes ndash Service Tax

Notifications under the Act

Notification No172009-ST dt 07th July 2009

bullExemption provided to specified taxable services received by an

exporter of goods and used for export of goods pertaining to

specified services

bullThe present Notification supercedes Notification No412007-ST

dt 6th October 2007

bullServices of terminal handling added to list of services previously

enumerated in Notification No412007-ST

New Provision Amendment

Analysis

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

Exemption to taxable services received by an exporter of goods and

used for export of goods Transport of goods by road from

1048707 Container freight station or

1048707 Inland container depot to port or airport Commission agentbull Located outside India andbull Engaged under a contract or agreement or documentbull To act on behalf of the exporterbull To cause sale of goods exported out of India In case of services provided by the commission agent the exemption is

limited to 1 of the FOB value of the goods exported by the exporter for which the services have been used

Exemption will not be available on export of canalized item project export or export financed by Government of India of EXIM Bank or export made by Indian partner in a company with equity participation in an overseas joint-venture or wholly owned subsidiary

New Provision Amendment

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

bull Taxable services viz transport of goods by road service and business auxiliary services (amounts paid to foreign commission agents) exempted in relation to export of goods from India insofar as exporter is liable to pay Service Tax under the reverse charge mechanism

Analysis

Amendments to the Import Rules

bull The definition of the expression ldquoIndiardquo has been amended to include installationsstructures and vessels in the continental shelf of India and exclusive economic zone of India as a consequence of amendment to Notification No12002-ST by way of Notification No 222009-ST dt 7th July 2009

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Key Legislative Changes ndash Service Tax

Notifications under the Act

Notification No172009-ST dt 07th July 2009

bullExemption provided to specified taxable services received by an

exporter of goods and used for export of goods pertaining to

specified services

bullThe present Notification supercedes Notification No412007-ST

dt 6th October 2007

bullServices of terminal handling added to list of services previously

enumerated in Notification No412007-ST

New Provision Amendment

Analysis

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

Exemption to taxable services received by an exporter of goods and

used for export of goods Transport of goods by road from

1048707 Container freight station or

1048707 Inland container depot to port or airport Commission agentbull Located outside India andbull Engaged under a contract or agreement or documentbull To act on behalf of the exporterbull To cause sale of goods exported out of India In case of services provided by the commission agent the exemption is

limited to 1 of the FOB value of the goods exported by the exporter for which the services have been used

Exemption will not be available on export of canalized item project export or export financed by Government of India of EXIM Bank or export made by Indian partner in a company with equity participation in an overseas joint-venture or wholly owned subsidiary

New Provision Amendment

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

bull Taxable services viz transport of goods by road service and business auxiliary services (amounts paid to foreign commission agents) exempted in relation to export of goods from India insofar as exporter is liable to pay Service Tax under the reverse charge mechanism

Analysis

Amendments to the Import Rules

bull The definition of the expression ldquoIndiardquo has been amended to include installationsstructures and vessels in the continental shelf of India and exclusive economic zone of India as a consequence of amendment to Notification No12002-ST by way of Notification No 222009-ST dt 7th July 2009

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

Exemption to taxable services received by an exporter of goods and

used for export of goods Transport of goods by road from

1048707 Container freight station or

1048707 Inland container depot to port or airport Commission agentbull Located outside India andbull Engaged under a contract or agreement or documentbull To act on behalf of the exporterbull To cause sale of goods exported out of India In case of services provided by the commission agent the exemption is

limited to 1 of the FOB value of the goods exported by the exporter for which the services have been used

Exemption will not be available on export of canalized item project export or export financed by Government of India of EXIM Bank or export made by Indian partner in a company with equity participation in an overseas joint-venture or wholly owned subsidiary

New Provision Amendment

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

bull Taxable services viz transport of goods by road service and business auxiliary services (amounts paid to foreign commission agents) exempted in relation to export of goods from India insofar as exporter is liable to pay Service Tax under the reverse charge mechanism

Analysis

Amendments to the Import Rules

bull The definition of the expression ldquoIndiardquo has been amended to include installationsstructures and vessels in the continental shelf of India and exclusive economic zone of India as a consequence of amendment to Notification No12002-ST by way of Notification No 222009-ST dt 7th July 2009

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Key Legislative Changes ndash Service Tax

bull Notifications under the Act

bull Notification No182009-ST dt 07th July 2009

bull Taxable services viz transport of goods by road service and business auxiliary services (amounts paid to foreign commission agents) exempted in relation to export of goods from India insofar as exporter is liable to pay Service Tax under the reverse charge mechanism

Analysis

Amendments to the Import Rules

bull The definition of the expression ldquoIndiardquo has been amended to include installationsstructures and vessels in the continental shelf of India and exclusive economic zone of India as a consequence of amendment to Notification No12002-ST by way of Notification No 222009-ST dt 7th July 2009

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Key Legislative Changes ndash Customs Duty

Notification No402006-Cus dt 1st May 2006 ndash Duty Free Import Authorization (DFIA) mdash Exemption to materials imported thereagainst ndash amended retrospectively

bull The above Notification has been amended retrospectively to allow rebate of excise dutyunder Rule 18 amp 19(2) of the Central Excise Rules or Cenvat Credit of duty paid onmaterials used in the manufacture of exported goods

bull It further provides that duty free replenishments in respect of which rebate Cenvatcredit has been availed shall be used for the manufacture of dutiable goods in theexportersrsquo factory or that of his supporting manufacturer even after discharge of theexport obligation In case the materials imported are transferred with the permission ofthe Regional Authority or materials are imported against an authorization transferred bythe Regional Authority the importer shall pay the CVD on the material so imported ortransferred together with interest 15

Amended Section 3 of the CTAbull Section 3 has been amended to provide that where tariff values have been fixed forarticles manufactured in India under Section 3(2) of the Central Excise Act 1944 for thecollection of central excise duty the value of a like imported article shall be deemed tobe such tariff value Earlier the said Section 3 only provided for excise duty on a likearticle at any percentage of its value

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Key Legislative Changes ndash Customs Duty

Retrospective amendment to Section 8C of the CTA (Power of Central Government to impose Transitional Product Specific Safeguard Duty on Imports from Peoples Republic of China)

bull Section 8C has been amended retrospectively to extend the provisions of the Customs Act and the Rules amp Regulations made there under especially in respect of date of determination of rate of duty assessment non levy short levy refunds interest appeals offences and penalties in respect of country specific safeguard duty

bull It seeks to validate certain actions taken under the provisions of the Customs Act andthe Rules amp Regulations made there under with effect from 11th May 2002

Changes in Rate of Customs Duty

bull Reduction in RateFrom 75 to 25 Bio-Diesels (Chapter 29 or 38)

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Changes in Rate of Excise Duty

bull Reduction in RateFrom 14 + Rs 15 litre to 14 Naphtha (CETH 2710)

bull IncreaseIntroduction in RateFrom 4 to 8

bull Pure Terephthalic Acid and Dimethyl Terephthalate (CETH 29173700)bull Acrylonitrile (CETH 29261000)bull Polyster Chips (CETH 3907)bull Heat Resistant Latex Rubber thread (CETH 40070010)bull Heat resistant rubber tension tape (CETH 400821)

Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker is exemptedfrom Excise duty is the same is used in the manufacture of exempted foot wear

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Changes in Rate of Excise Duty

Notification No 42006-CE dt 1st March 2006 has been amended to provide that exemption from excise duty is available to Naphtha or Natural Gasoline Liquid ndash bull For use in the manufacture of fertiliser and if such fertiliser is cleared as such from the factory of production or

bull For use in the manufacture of ammonia if such ammonia is used in the manufacture of fertiliser and such fertilizer is cleared as such from the factory of production

The implication of these changes is that exemption to naphtha or NGL would not be available if they are used in the manufacture of fertiliser ammonia which in turn is used for manufacture of some other item

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Income Tax Rates

- Inclusive of applicable surcharge and education cess of 3

- 3090 where the total income is equal to or less than Rs10 million

- 4120 where the total income is equal to or less than Rs10 million

amp - No surcharge shall be levied from Financial Year 2009-10 (AY 2010 ndash 11)

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

India has cut excise duty on naphtha to 14 percent from 16 percent for use in petrochemical and power generation plants while the tax on naphtha used by fertiliser firms remains zero

Naphtha imports have fallen substantially as many fertiliser plants have switched to gas produced from a new field operated by Reliance Industries in the countrys east coast In June Indias naphtha consumption fell 289 percent while imports dropped by 729 percent from a year earlier

Impact of tax cut on Naphtha import in India

It will bring down the imports and make local naphtha competitive with international prices

Marketing Head of leadingIndian oil firm

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

DISCLAIMER

This document is prepared by Polymerupdatecom for client service and internal use only This document summarizes the indirect and direct tax proposals of the Union Budget 2009 Expert guidance may be sought before acting upon the proposals

The analysisviews in this document should not be treated as legal opinion Nothing contained herein can substitute appropriate legal opinion in fact specific situations that affect you or your enterprise

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom

Contact Us

Polymerupdatecom344 A - Z Industrial EstateG K Marg Near Peninsula Park Lower Parel Mumbai - 400013Maharashtra INDIA

CommunicationTel (91-22) 30408821 - 25Fax (91-22) 30408826e-mail infopolymerupdatecomWebsite wwwpolymerupdatecom