Imported goods may become costly in the coming Budget of 2020. The government may hike import duties on over 50 ‘non-essential’ items to bring the import goods on par with locally manufactured products.
The hike in import duties could be for over 50 ‘non-essential’ items such as handicrafts, electronics and chemicals. The levy could target goods worth about USD56 billion imports from China and other countries.
The levy of duty could revive the domestic manufacturing sector and the economy. The government has received recommendations for a hike in import tariffs from various trade and Finance Ministry officials. The hike in duties could be in the range of 5 to 10%.
Also Read: Union Budget 2020 Expectations: Tax Relief for Investors
The government had also received various suggestions in the pre-Budget meetings held with a committee of members of local industries and trade ministry officials. There were suggestions for increasing the duties on over 130 items worth USD100 billion in import value. The Finance Ministry has however shortened the list.
The other suggestions include prescribing ‘quality-standards’, imposing Border Adjustment Tax (BAT) on certain imports.
In the Union Budget 2019 presented in July 2019, the government has increased import duties on over 75 items, including automobile parts and gold. Several restrictions had been imposed on import goods since 2014. At the same time, the government has favoured foreign investments in various sectors such as manufacturing, defence and others.
For any clarifications/feedback on the topic, please contact the writer at sweta.dugar@cleartax.in
I am a Chartered Accountant by profession. I specialise in personal taxes and corporate income tax matters. I am an avid reader and track developments in financial markets, economy and other market developments.
