Circulars

CHEMEXCIL Update Union Budget 2025 Customs related changes regarding.
 

 

 

CHEMEXCIL
Basic Chemicals, Cosmetics & Dyes Export Promotion Council
(Set-up by Ministry of Commerce and Industry, Govt of India)
Jhansi Castle, 4th floor, 7-Cooperage Road,   Mumbai - 400 001.

Tel  :+91-22-69821200 to 206 Fax No : 22-69821226 / 37
Twitter : @chemexcil
E-mail: info@chemexcil.in
Website: http://www.chemexcil.in

EPC:LIC:UNI-BUD:UPD-GST-CUS:PW:2025-26:1526                                                                3rd February 2025  


To
ALL THE MEMBERS OF THE COUNCIL

 

CHEMEXCIL Update Union Budget 2025 Customs related changes regarding.

 

Dear Members,

This has reference to our circular no. EPC:LIC:UNION BUDGET:2025-26:PW:MISC 02 dated 1st February 2025 on UNION BUDGET 2025-26:- Highlights for Chemicals / Exports.
    
This is a rejoinder of the same stating the changes related to Customs law.

  1. Section 18 of the Customs Act, 1962 has been amended to provide for a timeline of two years for finalisation of provisional assessment of Bills of Entry/Shipping Bills. This period can be extended by Commissioner of Customs for a further period of one year on sufficient cause being shown. For pending provisionally assessed Bill of entry/Shipping Bill period of 2 years will be reckoned from date of assent of Finance Bill, 2025. This period of 2 year will not apply in following cases:

    • Information sought from an authority outside India through legal process (i.e. CAROTAR verification etc.); or

    • Where appeal is pending before Appellate Tribunal/High Court/Supreme Court; or

    • An interim order of stay has been issued by Appellate Tribunal/High Court/Supreme Court; or

    • Board has in a similar matter passed direction or order for keeping matter pending; or

      • Matter pending before Settlement Commission/Interim Board.
 

Through this amendment the government has introduced definitive timeline of two years, further extendable by one year, for finalisation of provisional assessment. The government has also provided certain exclusion from the timeline in order to cater to assessments involving litigation, direction from CBIC, verification under CAROTAR 2020 etc. CBIC needs to clarify if the provisional assessment pending due to non closure of SVB investigation will not be covered in the time limit of two years as per under clause (d) of Section 18(1C).

  1. Section 18A has been inserted in the Customs Act, 1962 to provide for voluntary revision of Bill of Entry/Shipping Bill post clearance. Hence, now even after clearance the importer/exporter can self-assess the duty in case there is any short-levy, non levy, short-paid, not paid etc. and voluntarily undertake the payment of such duty along with applicable interest under Section 28AA of the Customs Act, 1962. In cases wherein the said revision results in refund of duty to the importer/exporter, the said revised entry will be treated as a refund claim under Section 27 of the Customs Act, 1962. However, cases where the department has already initiated an Audit or Investigation have been excluded from its purview. Also, the proper officer can verify the revised assessment basis the risk evaluation and can re-assess also in case the revised assessment is not correct.

This is a welcome step by the Government to incentivize voluntary compliance, enabling importers/exporters to voluntarily declare material facts and pay duty with interest and without penalty, after the clearance of goods. This, in turn, will contribute to higher duty collection by the Government to meet its revenue targets. We understand time and manner for such amendment will be prescribed by issuing Rules/Notification once the Finance Bill gets assent.

  1. Section 27 of the Customs Act, 1962 deals with refund of duty. An explanation has been added which provides that the period of limitation of one year to claim refund in case of amendment under Section 149, or under Section 18A shall be computed from the date of payment of such duty or interest.

Department will clarify the same as normally the period of one year should be calculated from the date of amendment

  1. The government has proposed to abolish the Customs, Central Excise and Service Tax Settlement Commission with effect from 01.04.2025. Further, the government intends to establish “Interim Boards for Settlement” to process the pending applications as of 31.03.2025. No fresh application for settlement will be accepted on or after 01.04.2025.

The reason for abolishing the Settlement Commission seems that as under Section 28 of the Customs Act, 1962 provisions are there wherein normal matters can be closed on payment duty and interest. Further, cases involving fraud, misrepresentation, etc. can be closed by paying additional 15% penalty. The Settlement Commission had the power to forego the penalty and close the matter only with the payment of duty and interest. Since the same purpose can be completed under Section 28 of the Customs Act, 1962, so to avoid additional resources the government may have abolished the Settlement Commission.

  1. The IGCR (Import of Goods at Concessional Rate) Rules have been amended to increase the time limit from 6 months to 1 year for fulfilling end use. Also, there is a requirement to file Quarterly return instead of Monthly return.

This is a good move by the Government, providing operational flexibility to importers availing IGCR benefits. The industry was not able to use goods within 6 months and they have to pay duty. Even due to non-marking/numbering on goods, industry was not able to re-export even before 6 months expiry and claim drawback under Section 74 of the Customs Act, 1962.

Chemical sector Tariff Reduction in Basic Customs Duty rate to support domestic manufacturing and value addition for certain specified goods (with effect from 2 February 2025 and 1 May 2025)

Products details and Particulars

HSN Details

Current Tariff Rate

New Tariff Rate

Phosphoric Acid

28092010

20%

7.5% BCD (w.e.f. 01.05.2025)

Boric Acid

28100020

27.5%

7.5% BCD (w.e.f. 01.05.2025)

Heterocyclic Compounds With Nitrogen Hetero-Atom(S) Only : Others

293359

10%

7.5% BCD (w.e.f. 02.02.2025)

Synthetic flavouring essences and mixtures of odoriferous substances of a kind used in food and beverage industry

330210

100%

20% BCD and 10% SWS (w.e.f. 02.02.2025) 20% BCD (w.e.f. 01.05.2025)

Candles, tapers and the like

3406

25%

20% BCD and 7.5% AIDC and NIL SWS (w.e.f. 02.02.2025) 20% BCD (w.e.f. 01.05.2025)

Pharmaceutical Reference standard, Certified/ other reference materials

382290

30%

10% BCD (w.e.f. 01.05.2025)

Sorbitol

382460

30%

20% BCD and 10% SWS (w.e.f. 02.02.2025) 20% BCD (w.e.f. 01.05.2025)

Prepared Binders, chemical products and preparations of chemical or allied industries

38249900

17.5%

7.5% BCD (w.e.f. 02.02.2025)
 

Other Proposals:

  • In Chapter 28 (Chapter Headings 2812, 2813), in Chapter 29, and in Chapter 38 (Chapter Heading 3808, 3813 and 3814), there are multiple New Supplementary Notes and tariff items which are being created, substituted or modified and need to be separately evaluated.

  • Laboratory Chemicals:BCD Rate reduced from 150 % to 70%.

  • Revision in Agriculture Infrastructure and Development Cess (AIDC) from Nil to 70%

  • Exemption from Social Welfare Surcharge (SWS)

  • Conditional exemptions/concessional rate extended till 31-03-2027 on the following entries of NN 50/2017-Customs:

  • S.No. 81A: Crude Glycerin for use in manufacture of Epichlorohydrin

  • S.No. 104B: Denatured ethyl alcohol for use in manufacture of industrial chemicals

Enclosed herewith is the desired document for your kind perusal.

Members are requested to take the note of it

Thanks and Regards

Raghuveer Kini
Director General
CHEMEXCIL


Encl : dojstru1