- I start with GST. It has decreased tax incidence on the common man; reduced compliance burden and logistics cost for trade and industry; and enhanced revenues of the central and state governments. It is a success of vast proportions. To multiply the benefits of GST, we will strive to further simplify and rationalise the tax structure and endeavour to expand it to the remaining sectors.
- My proposals for customs duties intend to support domestic manufacturing, deepen local value addition, promote export competitiveness, and simplify taxation, while keeping the interest of the general public and consumers surmount.
- In Budget 2022-23, we reduced the number of customs duty rates. I propose to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes.
- I shall now take up sector specific customs duty proposals.
Medicines and Medical Equipment
- To provide relief to cancer patients, I propose to fully exempt three more medicines from customs duties.
- I also propose changes in the BCD on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, so as to synchronise them with domestic capacity addition.
Mobile Phone and Related Parts
- With a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured. In the interest of consumers, I now propose to reduce the BCD on mobile phone, mobile PCBA and mobile charger to 15 per cent.
See also Provisions and Amendments Relating to “Tax Administration” under Finance (No.2) Bill, 2024.
Critical Minerals
- Minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics. I propose to fully exempt customs duties on 25 critical minerals and reduce BCD on two of them. This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors.
Solar Energy
- Energy transition is critical in the fight against climate change. To support energy transition, I propose to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country. Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them.
Marine products
- India’s seafood exports in the last financial year touched an all-time high of more than Rs. 60,000 crore. Frozen shrimp accounted for about two-thirds of these exports. To enhance their competitiveness, I propose to reduce BCD on certain broodstock, polychaete worms, shrimp and fish feed to 5 per cent. I also propose to exempt customs duty on various inputs for manufacture of shrimp and fish feed.
Leather and Textile
- Similarly, to enhance the competitiveness of exports in the leather and textile sectors, I propose to reduce BCD on real down filling material from duck or goose. I am also making additions to the list of exempted goods for manufacture of leather and textile garments, footwear and other leather articles for export.
- To rectify inversion in duty, I propose to reduce BCD, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.
- Furthermore, the export duty structure on raw hides, skins and leather is proposed to be simplified and rationalized.
Precious Metals
- To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent.
Other Metals
- Steel and copper are important raw materials. To reduce their cost of production, I propose to remove the BCD on ferro nickel and blister copper. I am also continuing with nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap.
Electronics
- To increase value addition in the domestic electronics industry, I propose to remove the BCD, subject to conditions, on oxygen free copper for manufacture of resistors. I also propose to exempt certain parts for manufacture of connectors.
Chemicals and Petrochemicals
- To support existing and new capacities in the pipeline, I propose to increase the BCD on ammonium nitrate from 7.5 to 10 per cent.
Plastics
- PVC flex banners are non-biodegradable and hazardous for environment and health. To curb their imports, I propose to raise the BCD on them from 10 to 25 per cent.
Telecommunication Equipment
- To incentivise domestic manufacturing, I propose to increase the BCD from 10 to 15 per cent on PCBA of specified telecom equipment.
Trade facilitation
134. To promote domestic aviation and boat & ship MRO, I propose to extend the period for export of goods imported for repairs from six months to one year. In the same vein, I propose to extend the time-limit for re-import of goods for repairs under warranty from three to five years.
