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(March 01, 2010) Union Budget 2010-11: Indirect Taxes
The Union Budget 2010-11 was tabled on February 26, 2010 in the Parliament. No significant budget proposals have been made impacting the paper industry.
Excise Duty:
The excise duty on paper and paperboard has been retained at 4%. However excise duty @ 10% is imposed on some of the paper products viz baby and clinical diapers and sanitary napkins which were fully exempt hitherto. Also, excise duty on cartons, boxes and cases of corrugated paper or paper board manufactured by standalone manufacturers is reduced from eight to four per cent.
Notification No 10/2010 - Central Excise Dated 27th February, 2010
Customs Duty:
The basic custom duty on import of paper and paper board is retained at 10% as before.
Exemption from 4% additional duty of customs (Special CVD) is provided on import of wastepaper and paper scrap effected by the traders. However, there is no change in its tariff structure in case of import by the Actual Users.
Notification No.24/2010 � Customs dated 27th February, 2010
Union Budget 2009-10
Central Excise
48.1 Excise duty on all goods falling under heading 4820{folders, file covers, manifold
business forms & other articles of stationery, of paper or paperboard (except notebooks and exercise books )} is being increased from 4% to 8% [S.No. 2 of the notification No. 10/2006-Central Excise as amended vide notification No. 17/2009-CE refers]. Notebooks and exercise books continue to be exempted [S.No. 97 of notification no. 4/2006- Central Excise dated 01.03.2006]
48.2 Excise duty on paper and paperboard labels is being increased from 4% to 8% [S.No.
3 of the notification No. 10/2006-Central Excise as amended vide notification No. 17 /2009-CE refers].
Notification No. 17/2009-Central Excise, July 07, 2009
G.S.R. (E).- In exercise of the powers conferred by sub-section(1) of section 5A of
the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 10/2006-Central Excise, dated the 1st March, 2006, published in the Gazette of India, Extraordinary, vide number G.S.R. 100(E), dated the 1st March 2006, namely:-
In the said notification, in the Table,-
- against S.No. 1, for the entry in column (4), the entry �8%� shall be substituted;
- against S.No. 2, for the entry in column (4), the entry �8%� shall be substituted;
- against S.No. 3, for the entry in column (4), the entry �8%� shall be substituted;
- against S.No. 8, for the entry in column (4), the entry �8%� shall be substituted;
- against S.No. 9, for the entry in column (4), the entry �8%� shall be substituted.
[F. No.334/13 /2009-TRU]
(Prashant Kumar)
Under Secretary to the Government of India
Note. - The principal notification No. 10/2006-Central Excise, dated the 1st March, 2006 was published vide number G.S.R.100(E), dated the 1st March, 2006, and last amended vide notification No. 58/2008-Central Excise , dated the 7th December,2008 and published vide number G.S.R. 840(E), dated the 7th December,2008.
Waste Paper Import Issue: Waste Paper imports into India have been under OGL & un-restricted. However with effect from March 18, 2009 the Customs Authorities referring to a notification by MoEF dated Sept 24, 2008 have started insisting on prior permission of MoEF and a licence from DGFT for imports of waste paper. This sudden move has adversely affected large segment of paper industry as a huge number of Waste Paper consignments have piled up at different ports of discharge due to non-clearances by the Customs across the country resulting in heavy demurrage on detention.
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Cost Benefit Analysis on �Public Private Partnership in Re-Greening Of Degraded Revenue/Private/Forestlands":An independent study by a team of senior researchers drawn from University of Southern California, USA; Indian Institute of Management, Ahmedabad; Indian Institute of Forest Management, Bhopal; CREATE and World Bank has shown that a public-private partnership that entails wood-based industry getting access to a fraction of degraded land could help generate rural employment, increase green cover and make industry competitive globally. The analysis found that if 1.2 million hectares of degraded land is leased out to the industry, the total benefit works out to be well above Rs 10,500 crore per year.
The findings of the study have been captured in the following three videos.
Safeguard Duties: Safeguard action by countries which face a situation of increased imports of
any commodity which causes or threaten to cause serious injury to domestic
producers of like or directly competitive products, is WTO compatible. The
safeguard action can include the imposition of tariff over and above the
applicable custom duty. The Customs Tariff Act, 1975 has been amended to
include various provisions for giving relief to the domestic producers
against injury caused to them by imports. The provisions under Section 8B,
Section 8C, Section 9A, Section 9B and Section 9C and the Rules made there
under are aimed at offsetting the adverse effects of increased imports,
subsidized imports or dumped imports & imports from Peoples' Republic of
China.
Multiplicity of DEPB rates for paper/paper boards as export deterrent: There are a few export deterrents that curb export competitiveness of the Indian Paper Industry such as low DEPB rate applicable to paper, paper boards and paper products besides high inland freight cost, uncompetitive interest rates, infrastructural deficiencies, procedural handicaps etc.
Over the years IPMA has been requesting Government of India to disband multiplicity and introduce uniformity in DEPB rates as an analogy to Custom Duty rationalisation; also applicability of a uniform DEPB rate of around 12% to all varieties of paper /paper boards. IPMA has also been requesting the Government of India to bring about an amendment in nomenclature clubbing all the paper varieties into a single item under a description to read as �paper & boards of all sorts�.
Central Excise Rates: Recently the Indian government has announced three stimulus measures to boost the economy. The first stimulus package announced on December 07, 2008 entailed 4% cut in cenvat across the board. A link to the notification no. 58/2008 � Central Excise, Dated : December 7, 2008, issued in this regard is attached. The excise duty on paper and paper boards has been reduced from 8% to 4%.
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The Union Budget (2008-09): Earlier in the Union budget 2008-09, changes in excise and custom duties were made through the Finance Bill (clause 63 to clause 84, clauses 117 and 120) and through Notification Nos. 2/2008-CE to 14/2008-CE and 10/2008-CE(NT) to 14/2008-CE(NT) as well as 20/2008- Cus to 29/2008-Cus, 11/2008- Cus(NT), all dated 1st March, 2008. The salient features were:
- Excise duty on paper and paper products, manufactured from non-conventional raw materials, beyond clearance of 3500 meteric tonne per year from a unit (not having an attached bamboo/wood pulp plant) was reduced from 12% to 8%.
- Excise duty on writing paper, printing paper and packaging paper falling under heading nos. 4802, 4804, 4805, 4807, 4808 and 4810 was reduced from 12% to 8%.
- Excise duty was fully exempted on paper and paper products, manufactured from non-conventional raw materials upto first clearance of 3500 metric tonne in a year from a unit.
General CENVAT Rate: (Notification No. 2/2008-CE) The general rate of excise duty (CENVAT) was reduced from 16% to 14%. This reduction applied to all goods that hitherto attracted this general rate of 16%. In some cases, a deeper reduction was made, These changes were carried out by notification. The other ad valorem rates of 24%, 12% and 8% were retained.
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Environment Protection Act: The draft on Hazardous Materials (Management, Handling and Transboundary Movement) Rules, 2007 has been widely discussed and IPMA flagged various concerns pertaining to Paper Industry through representations and on various interactive platforms and so did Confederation of Indian Industry (CII).
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