With an aim to promote the manufacturing sector of the country, the Union Budget 2019 has proposed significant changes in relation to basic custom duties on various commodities.
The government has recommended customs duty increase on several products, has withdrawn exemption on a few products, and has lowered the rates on specific commodities to promote value addition and to boost domestic manufacturers.
Nirmala Sitharaman, the Finance Minister, has announced exemption of basic customs duty on defence equipment which is not manufactured in India. FM has also proposed to increase the customs duty on various commodities ranging between CCTV cameras and stainless steel to outdoor split air-conditioner units and cameras.
FM has also brought down the customs duty on parts which are used in the manufacturing of electric vehicles.
Other budget proposals which are going to boost the ‘Make in India’ initiative include:
- The basic customs duty has been increased on PVC, cashew kernels, tiles, marble slabs, auto parts, CCTV camera, and optical fibre cable.
- Custom duty exemptions have been withdrawn on specific electronic products which are manufactured in India.
- End use-based exemptions on fatty oils and palm stearin have been withdrawn.
- Exemptions in relation to several kinds of papers have been withdrawn.
- A basic custom duty of 5% will be levied on imported books.
- Customs duty has been reduced on specific raw materials such as:
- Disposable sterilised dialyser, inputs for artificial kidney, and fuels for nuclear power plants.
- Capital goods which are required for manufacturing specific electronic goods.
Financial experts believe that these measures are going to motivate the ‘Make in India’ initiative and help the government in achieving the goal of doubling Indian GDP (Gross Domestic Product) in the following five years.