Fm Sitharaman Proposes To Ease Basic Customs Duty On Various Goods

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FM Sitharaman proposes to ease basic customs duty on various goods

ri-calendar-2-lineFeb 1, 2023

By: BlinkX Research Team

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The Finance Minister today has proposed to reduce the number of Basic Custom Duty (BCD) rates on goods, other than textiles and agriculture, from 21 to 13. This has necessitated minor changes in the basic custom duties, cesses and surcharges on some items including toys, bicycles, automobiles and naphtha.

 

With an aim to promote exports, boost domestic manufacturing, enhance domestic value addition and encourage green energy and mobility, the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget 2023-24 in Parliament today. FM emphasised, “A simplified tax structure with fewer tax rates helps in reducing compliance burden and improving tax administration.”

 

In order to avoid cascading of taxes on blended compressed natural gas, the Finance Minister proposed to exempt excise duty on GST-paid compressed bio gas contained in it. To further provide impetus to green mobility, she announced to extend the customs duty exemption to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles.

 

FM Sitharaman proposed to provide relief in customs duty on import of certain parts and inputs like camera lens and continue the concessional duty on lithium-ion cells for batteries for another year in order to further deepen domestic value addition in manufacture of mobile phones. The Minister stated that the mobile phone production in India had increased from 5.8 crore units valued at about Rs. 18,900 crore in 2014-15 to 31 crore units valued at over Rs. 2,75,000 crore in the last financial year as a result of various initiatives of the Government, including the Phased Manufacturing programme.

 

FM Nirmala also proposed to reduce the BCD on parts of open cells of TV panels to 2.5% to promote value addition in manufacture of televisions.

 

Further, the Finance Minister proposed an increase in the BCD on electric kitchen chimney from 7.5% to 15% and a reduction on heat coils from 20% to 15%. This change would rectify inversion of duty structure and encourage manufacturing of electric kitchen chimneys.

To support the Ethanol Blending Programme and facilitate India’s endeavour for energy transition, the Minister proposed to exempt BCD on denatured ethyl alcohol. She also announced to reduce BCD on acid grade fluorspar from 5 % to 2.5% to make the domestic fluorochemicals industry competitive. The BCD on crude glycerin for use in manufacture of epicholorhydrin was also proposed to be reduced from 7.5% to 2.5%.

 

The Finance Minister proposed to reduce the BCD on key inputs for domestic manufacture of shrimp feed to enhance the export competitiveness of marine products. She stated that the marine products recorded the highest export growth in the last financial year, benefitting farmers in the coastal states of the country.

 

The Budget proposed to nullify the BCD on seeds used in the manufacturing of Lab Grown Diamonds from the current 5%.  The Finance Minister stated that India contributed about three-fourths of the global turnover by value in cutting and polishing of natural diamonds industry. With the depletion in deposits of natural diamonds, the industry is moving towards Lab Grown Diamonds.

 

The Minister proposed to increase the duties on articles made from dore and bars of gold and platinum to enhance the duty differential. The customs duties on dore and bars of gold and platinum were increased earlier this fiscal. She also proposed to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum.

 

To facilitate the availability of raw materials for the steel sector, the Finance Minister proposed to continue the exemption from BCD on raw materials for manufacture of CRGO Steel, ferrous scrap and nickel cathode. She also proposed to continue the concessional BCD of 2.5% on copper scrap to ensure the availability of raw materials for secondary copper producers who are mainly in the MSME sector.

Sitharaman proposed to increase BCD rate on compounded rubber from 10% to ‘25 per cent or Rs. 30/kg whichever is lower’, at par with that on natural rubber other than latex, to curb circumvention of duty.

 

The Finance Minister proposed to revise upwards the National Calamity Contingent Duty (NCCD) on specified cigarettes by about 16%. It was last revised 3 years ago.

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