Circular No. ES/427/2020-21 8th February, 2021
To: Members of the Council
Sub: ICES Advisory on BUDGET 2021 related changes in EDI System
JNCH (Nhava Sheva) has issued Public Notice No. 14/2021 dated 3rd February, 2021 regarding ICES Advisory on BUDGET 2021 related changes in EDI System.
Union Budget 2021-22 announced on 1st February, 2021 has introduced some key changes on the Customs front. Changes in the duty structure and introduction of new levies has come into effect from 2nd February, 2021. All the notifications on rate changes have been duly updated in ICES and System has been restored for Bill of Entry filing from 3rd February, 2021 onwards.
The application of newly introduced levy in System as detailed below is being publicized to ensure correct filing of Bes:
Relevant extract of the Public Notice if as follows:-
Agriculture Infrastructure and Development Cess (AIDC)
One of the major changes in the duty structure is the introduction of Agriculture Infrastructure and Development Cess (AIDC) on Import goods vide clauses 115 and 116 (wherever excisable) of the Finance Bill, 2021.
Clause 115 states:
“Where on the goods specified in the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as the Customs Tariff Act), being the goods imported into India, at the rate not exceeding the rate of customs duty as specified in the said Schedule, for the purposes of financing the agriculture infrastructure and other development expenditure.”.
Further, for the calculation for AIDC, sub-clauses (3) and (4) state:
“(3) Where the duty is leviable on the goods at any percentage of its value, then, for the purposes of calculating the Agriculture Infrastructure and Development Cess under this section, the value of such goods shall be calculated in the same manner as the value of goods is calculated for the purpose of customs duty under section 14 of the Customs Act, 1962.
(4) The Agriculture Infrastructure and Development Cess on imported goods shall be in addition to any other duties of customs chargeable on such goods, under the Customs Act, 1962 or any other law for the time being in force.”
Similarly, Clause 116 levies AIDC as a duty of excise on excisable goods mentioned in the Seventh Schedule to the Finance Bill. In sub-clause (3), it is clarified that:
“(3) The cess leviable under sub-section (1), chargeable on the scheduled goods, shall be in addition to any other duties of excise chargeable on such goods under the Central Excise Act, 1944 or any other law for the time being in force.”
Necessary changes have been done in the System to include the new levy. AIDC as a duty of Customs will be applicable for all items unless exemption is claimed by relevant notification. For all items falling under the Sl. No. 1 to 16 of the Notification 11/2021 – Customs dated 1st February, 2021, the relevant notification and sl. No. will have to be mentioned by the importer in the Bill of Entry for the applicable effective rate. Even for all other items which are completely exempted from AIDC, relevant Sl. Nos. (17 to 19) must be quoted in the Bill of Entry. Thus, the claim of AIDC notification shall be mandatory in the Bill of Entry.
Excise AIDC is applicable only for Petrol and High Speed Diesel. Importer can claim the benefit of relevant Central Excise exemption notification(s), wherever applicable.
While filing Bills of Entry through service centre or online through ICEGATE, following declarations will have to be made in the BE_DUTY table of the bill of entry to claim the above Exemption Notifications with following flags:
Flags for Customs AIDC Notification: NOTN TYPE as ‘C’ and Additional Duty Flag as ‘A’
Flags for Excise AIDC Notification: NOTN TYPE as ‘E’ and Additional Duty Flag as ‘A’
Necessary changes have also been made in other modules of ICES for facilitating changes in the assessment and duty calculation
Further, it is clarified in Para I (3) of Annexure C of the letter dated 1st February, 2021 issued by JS(TRU-1) that SWS would be levied on AIDC.
Since most budgetary changes are effective from 2nd February, 2021, members are also requested to check the correctness of duty calculation for bills of entry which were cleared on 2nd and 3rd February, 2021. Further, considering that the above new levy brings a calculation change in the duty logic, the imposition of AIDC on the relevant goods and the calculation of duty by the EDI system may also be verified manually for the first few days. Any discrepancy found may immediately be brought to the notice of Directorate General of Systems and Data Management, CBIC by email to email@example.com.
In case of any difficulty, members may kindly contact the Addl. /Joint Commissioner [(Appraising Main (Import)] through email at firstname.lastname@example.org.
Members may kindly make a note of the above and do the needful as advised by Customs.