Dear Members ,
As you are well aware that Budget for 2017-18 was presented by FM on 1 st February 2017 .
Although there is no major change related to Excise Duty on agriculture products , there is some mention related to Chapter 31 . Due to this there is some concern about exact interpretation of new notification no 06/2017 published by the Govt. of India in the current budget . The notification 06/2017 says - against serial number 128, for the entry in column (2), the entry '31 (except 3101)' shall be substituted; This change to be amended in old notification No. 12/2012 .
" Goods falling under heading 3101 of the Central Excise Tariff attract Nil Central Excise duty by tariff.
Notification No.12/2012-Central Excise dated 17.03.2012 [S.No.128, which prescribed a concessional excise duty of 1% subject to certain conditions] is being amended so as to exclude goods falling under heading 3101 from the purview of the said entry.
Notification No. 12/2012- Central Excise, dated 17th March, 2012 as amended by notification No.6/2017-Central Excise dated the 2nd February, 2017 [S. No. 128] refers "
Meaning of above text is that since chapter 3101 attracts NIL excise duty by Tariff itself , it is specially mentioned in new notification No. 06/2017 to exclude sub chapter 3101 and continue to levy 1% excise duty ( under certain conditions such as no MODVAT credit ) or 6% with MODVAT credit to other headings from 3102 to 3105 . This further also means that goods falling under chapter 3101 will attract NIL excise duty . Chapter 3102 , 3103 , 3104 and 3105 will continue to attract same excise duty as per old notification 12/ 2012 ( 1% or 6% )
Now since this clarification is done in this budget , Excise department may ask you to pay 1% excise duty for all earlier clearance done by NIL duty till 01.02.2017 . But since goods falling under heading 3101 attract NIL Central Excise duty by tariff , one need not pay this tax and should consult Tax Consultant immediately . On the other hand by insertion of words ' excluding 3101 ' the Finance Department has tried to clear the ambiguity related to exact taxation of goods falling under heading 3101 of Central Excise .
Hope this is clear to everyone . In case of any doubt you can call the undersigned or consult your tax consultant for verification of above explanation .
Thanks and best regards,
Dear Members ,