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UNION BUDGET 2017-18: Highlights & provision for exports and chemicals sector

Basic Chemicals, Cosmetics & Dyes Export Promotion Council
(Set-up by Ministry of Commerce and Industry, Govt of India)

Jhansi Castle 4th Fl., 7 Cooperage Road, Mumbai - 400 001.India.

Tel : +91 22 22021288 / * Fax : +91 22 22026684

* E-mail : Web :



2nd February 2017




UNION BUDGET 2017-18: Highlights & provision for exports and chemicals sector


Dear Sir/ Madam,

As you are aware,  Hon’ble  Union Minister of Finance Shri Arun Jaitely has presented the Union Budget 2017-18 on 1st  February 2017. 

The Agenda for Union Budget 2017-18 is-  “Transform, Energise and Clean India” – TEC India. 

As per the budget, it is proposed  to focus  on 10 broad themes — farmers, rural population, youth, poor and health care for the underprivileged; infrastructure; financial sector for stronger institutions; speedy accountability; public services; prudent fiscal management; tax administration for the honest.   

The key economic indicators as per budget statement are following:

  • Recommended 3% fiscal deficit for three years with deviation of 0.5% of GDP.
  • Revenue deficit - 1.9 %
  • Pegged fiscal deficit of 2017-18 at 3.2% of GDP and remain committed to achieving 3% in the next year.
  • Foreign exchange reserves have reached 361 billion US Dollars as on 20th January, 2017

For the convenience of the members,  given below is gist of  provisions  in Union Budget 2017-18 from exports and chemicals perspective. 

Ø Customs Duty: 

There is no change in the peak rate of BCD, however, changes in Customs duty  have been made to address the problem of duty inversions in certain sectors. The changes related to chemical sector are as under-


Chemicals & Petrochemicals

HS Code

Existing Duty

Proposed Duty





BCD – 2.5%

BCD – Nil


2-Ethyl Anthraquinone for use in manufacture of hydrogen peroxide, subject to actual user condition.


BCD – 7.5%

BCD – 2.5%


Vinyl Polyethylene Glycol (VPEG) for use in manufacture of Poly Carboxylate Ether, subject to actual user condition


BCD – 10%

BCD – 7.5%


Medium Quality Terephthalic Acid (MTA) & Qualified Terephthalic Acid (QTA)


BCD – 7.5%

BCD – 5%


Liquefied Natural Gas


BCD – 5%

BCD – 2.5%


Catalyst for use in the manufacture of cast components of Wind Operated Electricity Generator [WOEG], subject to actual user condition


BCD – 7.5%


BCD – 5%

SAD- exempted

Ø Central Excise Duty 

There is no change in the peak rate of Excise Duty of 12.5%.   However, amendments have been made to specific tariff rates in various sectors  by exemption notifications. 

Further, there is a clarification in  TRU circular on Concessional / Nil rate of duty on inputs for EOUs otherwise available to DTA manufacturers.  It has been clarified that the exemptions available to DTA manufacturers on raw materials and inputs at concessional or Nil rate of BCD, excise duty / CVD or SAD are also available to EOU manufacturers, subject to the fulfilment of conditions.

Ø Service Tax 

The effective rate of service tax has been left unchanged at 15% (including Swachh Bharat Cess and Krishi Kalyan Cess).

Ø Amendments in HS Codes (without change of Duty) 

·        A new tariff line 1511 90 30  added for  “Refined bleached deodorised palm stearin

·        Stearic Acid HS code 38231111 has been changed  to 38231190 

Ø Procedural Changes/ Important amendments related to CBEC

·        Time limit for filing of bill of entry:

Sub-section (3) of Section 46 is proposed to be substituted to provide for filing of bill of entry before the end of the next day following the day on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing.   If the bill of entry is not presented within the time prescribed and there is no sufficient cause for delay, the importer will be liable to pay charges for late presentation.  There is no time limit prescribed at present. 

·        Time limit for payment of customs duty 

Sub-section (2) of Section 47 is proposed to be amended to provide that the importer shall pay the duty on the date of presentation of the bill of entry in the case of self-assessment or within one day from the date on which the bill of entry is returned to him by the proper officer in the case of assessment, reassessment or provisional assessment or in the case of deferred payment, from such due date as may be specified.   On failure to do so, the importer will be liable to pay interest on duty not paid at a rate not less than 10% and not exceeding 36% as notified by the Government.   At present, the importer is liable to pay duty within two days from the date on which the bill of entry is returned to him for payment. 

·        Storage of imported goods permitted for warehousing

Section 49 is proposed to be substituted to extend the facility of storage to imported goods entered for warehousing in a public warehouse, before their removal.   In terms of the present provision, the facility of storage of imported goods is only for goods intended for home consumption

Other important Budgetary provisions for MSME/ Exports/ Infrastructure 

Ø Corporate tax:  In order to make MSME companies more viable, it is proposed to reduce tax for small companies of turnover of up to Rs 50 crore to 25 %. This will reduce their tax liabilities. 

Ø A new and restructured Central scheme namely, Trade Infrastructure for Export Scheme (TIES)will be launched to boost  export infrastructure in  states which also improve logistics and reduce transaction costs of exports. 

Ø For transportation sector as a whole, including rail, roads, shipping, budget has provided  2,41,387 crores in 2017-18 which will spur an entire spectrum of economic activity. 

You are requested to take note of the same.  The major highlights of the budget 2017-18  are also  available in the attached file for your ready reference.

Thanking You,

Yours faithfully,
Satish Wagh

Enclosure:- Key Features of Budget 2017-2018

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