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Home» Circulars» Union Budget 2019 20 Key Highlights Provisions For Chemicals Sector

UNION BUDGET 2019-20 Key Highlights & provisions for Chemicals sector



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. India

Tel : +91 22 22021288 Website : www.//



EPC/LIC/BUDGET/2019-20                                                          05/07/2019











Key Highlights & provisions for Chemicals sector


Dear Members,


As you are aware,  Union Budget 2019-20  has been  presented on July 5, 2019 by  Hon’ble  Minister of Finance  - Smt. Nirmala Sitharaman.

This budget provides impetus to governments programmes  on Village, poor and farmers, women empowerment, renewable green/energy, infrastructure development, boosting FDI, digitization, revival of banking sector  etc.

Key Highlights/ Indicators of Union Budget 2019-20

    • From $1.85 trillion in 2014, the economy has reached $ 2.7 trillion.  Likely to reach to reach $ 5 trillion in the next few years
    • Fiscal deficit target has been cut from 3.4%   to 3.3%.
    • Bharat Mala 2.0 to focus on states to build their road networks
    • Corporate tax rate of 25 % for all companies with turnover of upto Rs 400 crore per year
    • Interchangeability of PAN and AADHAR.
    • PSU banks to be infused  Rs. 70000 crores to strengthen their lending capacity
    • Simplified return form for GST registered businesses in the offing


For Small businesses/MSMEs

    • To extend pension benefit to three crore retail traders with an annual turnover less than Rs 1.5 crore under Pradhan Mantri Karam Yogi Man Dan Scheme
    • Centre will create a payment platform for MSMEs for payment of bills
    • 100 new clusters will be set up in 2019-20 to enable 50,000 artisans to come into the economic value chain
    • To launch mission to integrate traditional artisans and creative persons with global market; to obtain GI/patents for them
    • Will set up 10,000 new farmer producer organisations
    • To start television programme exclusively for startup
    • Proposes to expand self-help groups to all districts; one woman in every SHG to get a loan up to Rs 1 lakh under Mudra Yojana
    • Startups who provide details in returns will have no scrutiny in respect of valuation of share premium
    • Period of exemption from capital gains from sale of startups extended




Chapter  15

(l)         The end use-based  exemption  on goods, having free fatty acid (FF A) 20% or more, is being withdrawn.  


Chapter -27


  • The effective  rate of Additional Duty of Customs  levied on imported  Motor  Spirit  [Petrol] and High Speed Diesel  Oil [commonly known  as Road and Infrastructure   Cess]  is being  increased  from Rs. 8 per litre to Rs. 9 per litre. These changes  will come into force with immediate effect

  •  A nominal  BCD of Re. 1 per tonne  is being  imposed  on imported  Petroleum  crude falling under tariff item 2709 00 00. Presently  the tariff item 2709 00 00 is exempt from BCD


  • BCD on Naphtha  falling under heading  2710 is being reduced  from 5% to 4%


Chapter  29

  • Basic Custom  Duty on Ethylene  dichloride  (EDC)],  falling under tariff  item 29031500  is being reduced  from 2% to Nil.


  • Basic Custom  Duty on Methyloxirane   (Propylene  Oxide), falling tariff item 29102000 is being reduced  from 7.5% to 5%.

  • The  end  use-based   exemption   on  goods  falling   under  sub-heading   291570  is  being withdrawn .


Chapter  38


  • The end use-based  exemption  on goods falling under oleo-chemicals tariff items  38231100, 38231200,38231300, 38231900 is being withdrawn.

  • S. Nos.  249A  and 250A  of notification  No.  50/2017-Customs   dated  30th  June,  2017,  are being  amended  so  as to  include  all  goods  under  the  tariff  items  3822 00 90  and  382499 90 respectively  within the ambit of these entries.




S. No.



Amendment in the Customs Tariff Act, 1975


Amendment to the section 9 so as to insert sub-section (1A) to provide for anti-circumvention measure in respect of countervailing duty.


Amendment to section 9C of the Customs Tariff Act, 1975 so as to provide appeal provisions against determination of safeguard duties to allow appeal against determination of safeguard duty by designated authority with CESTAT.


Amendment in the First Schedule of the  Customs Tariff Act, 1975



First Schedule to the Customs Tariff Act, 1975 is amended to:

  • Create specific tariff lines for specific products, presently classified as “others”;
  • Rectify the errors to align it with HSN.


Amendment in Chapter Notes to Chapter 98, so as to exclude Printed books imported for personal use from the purview of Chapter 98. Printed books imported for personal use will now attract applicable duty.




S.   No.



For facilitating trade


Allowing furnishing of departure manifest by a  person notified by the Central Government [ section 41].


For improving compliance


Introducing provisions for verification of Aadhar or any other identity and other compliance by a person for protecting the interests of revenue or to prevent smuggling [New section 99B]


Provision to enable the proper officer to scan or screen, with the prior approval, any person who has any goods liable to confiscation secreted inside his body and to enable the magistrate to take action upon the report of scanning by the proper officer [Section 103].


Empowering proper officer of customs to  arrest a person who has committed an offence outside India or Indian Customs waters and to make certain offences as cognizable and non-bailable [section 104]


(a) Empowering the proper officer to provisionally attach any bank account for safeguarding the government revenue and prevention of smuggling [section110].
(b) Providing powers to release bank account provisionally attached under section 110 on fulfilment of certain conditions [ section 110A].


Provide for penalty on any person who has obtained any instrument by fraud, collusion , wilful misstatement or suppression of facts which is utilised for payment of duty [New section 114 AB]


Provide for making the offence punishable  if the instrument obtained by  fraud, collusion, wilful misstatement or suppression of facts, is used for making payment of duty exceeding 50 lakh rupees [section 135]


Enhancing maximum penalty to

  • Rs 4 lakh for violation of provisions of the Act;
  • Rs 2 lakh for violation of Rules or Regulation [section 158]


For reducing litigation


Providing for that in respect of cases covered under deemed closure proceedings under section 28, no fine in lieu of confiscation shall be imposed on the infringing goods [section 125].


Sabka Vishwas Legacy Dispute Resolution Scheme


A dispute resolution cum amnesty scheme called “the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019” is being introduced for resolution and settlement of legacy cases of Central Excise and Service Tax. 


The proposed Scheme covers past disputes of taxes which have got subsumed in GST namely Central Excise, Service Tax and Cesses. All persons are eligible to avail the scheme except a few exclusions including as those convicted under the act in the case for which he intends to make declaration and those who have filed an application before the Settlement Commission.   The relief under the scheme varies from forty percent to seventy percent of the tax dues for cases other than voluntary disclosure cases, depending on the amount of tax dues involved. The scheme also provides relief from payment of interest and penalty. For voluntary disclosures, the relief is regarding waiver of interest and penalty on payment of full tax dues disclosed. The person discharged under the scheme shall also not be liable for prosecution. 


You are requested to take note of the above provisions.  The original budget documents/ notifications are available for download using below links-


We also look forward to your feed-back on the provisions of the Union Budget 2019-20.  The same can be mailed to us  on  &  .


Thanking You,

Yours faithfully,

S.G Bharadi
Executive Director




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