THE GOVERNMENT introduced a Bill in Lok Sabha on Friday to amend the customs and excise Acts to make them compliant with the new GST regime. The amendment seeks to include ‘warehouse’ in the definition of customs area to ensure that an importer is not asked to pay Integrated Goods and Services Tax (IGST) at the time of removal of goods from a customs station to a warehouse.
“The proposed bill also seeks to abolish cess levied on water consumed by certain industries and by local authorities under the Water (Prevention and Control of Pollution) Cess Act, 1977,” the statement of objects and reasons for the Bill stated. Finance Minister Arun Jaitley, who introduced it, brought The Taxation Laws (Amendment) Bill, 2017 to further amend the Customs Act, 1962; the Customs Tariff Act, 1975; Central Excise Act, 1944; Finance Act, 2001; and the Finance Act, 2005, within days of Lok Sabha passing four GST legislations.
“As the goods and services tax is to be introduced with effect from July 1, 2017, the four legislations…are in the process of being enacted,” it said.
As a result, central excise duty on goods other than crude oil, petrol, diesel, ATF and natural gas, service tax on taxable services and VAT on sale or purchase of goods will be subsumed in GST.
“Therefore, it requires certain consequential amendments in Customs Act, 1962, Customs Tariff Act, 1975, Central Excise Act, 1944, the Finance Act 2001 and the Finance Act 2005 and repeal of certain enactment,” it said.
The amendment is to provide for levy of IGST and GST compensation cess on imports goods as to provide a level playing field to the domestic industry. Also, certain consequential amendments are proposed to made in the excise act relating to certain definitions, charging sections, provision of deemed manufacture and insertion of emergency powers to increase the rate of duty.