To push domestic manufacturing and promote export competitiveness, the Budget has rejigged customs duties for some products, bringing it down for inputs such as electronic parts, certain chemicals and lab grown diamond seeds while raising it for some others such as electric kitchen chimney, automobiles and toys to correct inversion and protect local players.
Customs duties have been reduced on items such as pecan nuts, inputs for aquatic feed, seeds for lab-grown diamonds, specified capital goods for manufacture of lithium-ion cell for use in battery of electrically operated vehicles, parts for manufacture of camera module of cellular mobile phones and manufacture of open cell of TV panels and chemicals for manufacture of parts of connectors and pre-calcined ferrite powder.
To boost local production further, the Centre has removed duty on camera lens and its inputs and parts for manufacturing camera modules of cellular mobile phones. Basic Customs duty has also been removed on inputs used to manufacture parts of connectors (Palladium Tetra Amine Sulphate).
Pankaj Mohindroo, Chairman, India Cellular & Electronics Association said, “These steps will have no significant impact on the final product price but are generally in the right direction. The cost impact on mobile phone’s Bill of Material (BoM) will be 0.16 per cent to 0.19 per cent.”
“To further deepen domestic value addition in manufacture of mobile phones, I propose 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,” Sitharaman noted in her Budget speech.
Reducing the basic Customs duty on parts of open cells of TV panels to 2.5 per cent from 5 per cent will promote value addition in manufacture of televisions, she added. “This will really help the domestic TV manufacturing industry to scale up and compete with the global brands,” said Avneet Singh Marwah, Director and CEO, Super Plastronics Pvt Ltd.
“’The move will accelerate manufacturing and enable sales growth,” said Eric Braganza, President, Consumer Electronics And Appliances Manufacturers Association.
Exempting basic Customs duty on denatured ethyl alcohol will support the ethanol blending programme and facilitate the country’s endeavour for energy transition, the FM said. The proposed exemption in basic customs duty on seeds used in manufacture of lab grown diamonds (from existing 5 per cent) will give a big boost to the industry as there is a depletion in deposits of natural diamonds, she added.
Items where customs duties are being raised include toys and toy parts (excluding electronic toys), vehicles, bicycles, electric kitchen chimney, compounded rubber, silver, silver dore, articles of precious metals such as gold, silver, and platinum and cigarettes.
“To rectify inversion of duty structure and encourage manufacturing of electric kitchen chimneys, the basic customs duty on electric kitchen chimney is being increased from 7.5 per cent to 15 per cent and that on heat coils for these is proposed to be reduced from 20 per cent to 15 per cent,” the FM said.
Following the increase in customs duties on doors and bars of gold and platinum earlier this fiscal, the FM said. She proposed to increase the duties on articles made from them to enhance the duty differential.