Budget: Customs duty exemptions on 350 items withdrawn to boost ‘Make in India’

Finance Minister Nirmala Sitharaman has given a massive push to domestic manufacturing by withdrawing as many as 350 customs duty exemptions.

The Central Board of Indirect Taxes (CBIC) said the union government undertook a comprehensive review of Customs Duty exemption notifications. “Nearly 350 exemptions are being withdrawn,” it said.

The Budget has also proposed to review customs duty exemption on capital goods and project imports and more than 40 customs exemptions will be gradually phased out.

“In the last two budgets we have rationalised several customs exemptions. We have once again carried out an extensive consultation, including by crowd sourcing and as a result of these consultations, more than 350 exemption entries are proposed to be gradually phased out,” Nirmala Sitharaman said while presenting a Budget that has bet big on infra spending.

The Budget had rationalised customs duty rate on a host of goods. Duty on capital goods and project imports was rationalised by phasing out concessional rates and applying a moderate tariff of 7.5%.

However, exemptions for advanced machineries that are not manufactured within the country will continue.

For the electronics sector, customs duty rates are being standardised on wearable devices, hearable devices and electronic smart meters.

Besides, there has been a reduction in duty concessions on parts of the transformer of mobile phone chargers and the camera lens of the mobile camera module.

Also, the basic customs duty on hearable and wrist wearable devices and their inputs/ parts/ sub-parts will be increased in a phased manner.

In the gems and jewellery sector, customs duty on cut and polished diamonds and gemstones has been reduced from 7.5% to 5%.

Simply sawn diamond will attract nil customs duty imported under Kimberley Process Certification Scheme (KPCS).

Basic customs duty rate of 20% or 400/kg, whichever is higher, will be applied on imitation jewellery.

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