The government has allowed zero-duty imports of liquefied petroleum gas (LPG) by oil marketing companies (OMC) for supply to household domestic consumers. The excise duty on LPG for the same purpose has also been brought down to ‘nil’. These decisions follow the government’s decision to cap the supply of subsidised LPG to six cylinders per year for every household.
LPG attracts 5 per cent basic customs duty under S.No. 142 of the customs notification no. 12/2012 dated 17.3.2012 and 8% excise duty under S.No. 80 of the excise notification no. 12/2012 dated 17.3.2012. S.No. 141 of the said customs notification fully exempted basic customs duty on imported LPG and S.No. 81 of the said excise notification fully exempted excise duty on domestically produced LPG, cleared for supply to household domestic consumers at subsidised prices under the public distribution system (PDS) kerosene and domestic LPG Subsidy Scheme, 2002, as notified by the Ministry of Petroleum and Natural Gas vide notification No. P-20029/18/2001-PP dated January 28, 2003. Those entries have now been amended to allow full exemption from basic customs duty and excise duty for LPG imported or produced by the Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited or Bharat Petroleum Corporation Limited for supply to household domestic consumers.
The effect of the latest changes is that the OMCs will get full exemption from excise and customs duties for all imports or clearances of LPG for supplies to all household domestic consumers, whether at subsidised prices or at full prices, whether through PDS or otherwise. This should help them cut their under recoveries to some extent.
In a separate move, the finance ministry made it mandatory for those registered as Accredited Clients and importers paying a duty of Rs 1 lakh or more to make duty payment electronically. The ministry should find ways to enable units in Special Economic Zones (SEZ) also to make e-payment of customs duties. Many SEZ units are located away from cities and have frequent clearances of goods, especially waste or scrap. They have to pay duty on every clearance at designated bank branches which are located far away. A facility to deposit a lump sum and pay duty from that deposit, the way Personal Ledger Account (PLA) is operated under the Central Excise Law, can be useful to SEZ units.
The customs notification no. 52/2003 dated 31.3.2003 relating to Export Oriented Units (EOU) has been amended to clarify that goods rejected by buyers will also be covered under the entry permitting duty free imports of exported goods due to failure of foreign buyer to take delivery. This amendment removes an unnecessary nuisance that EOUs were facing at the ground level but it is surprising that it has taken almost ten years to bring in this clarification.
The Central Board of Excise and Customs (CBEC) has put up a draft circular for comments suggesting that Cenvat Credit of excise duties can be utilised for payment of National Calamity Contingency Duty (NCCD). The Board says that this position is in conformity with the decisions of the Tribunal in the Prog Bosmi Synthetics Ltd. case [2007 (216) ELT 254], which was confirmed by the Guwahati High Court. Since those decisions have been accepted by CBEC, the reason for a draft circular at this stage is somewhat intriguing.
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