The Central Board of Indirect Taxes & Customs (CBIC) has set the ball rolling for review of existing exemptions from customs duty, and review of custom duty laws, by inviting feedback from the stakeholders. This is a follow-up to Finance Minister Nirmala Sitharaman’s Budget announcement in February this year.

Feedback can be posted on MyGov portal (https://www.mygov.in/) by August 21 and final review will take place in September.

According to information available on the website of CBIC, various customs exemptions have been categorised into 241 notifications, with some of them having a sunset clause, such as exemption given for FIFA under-17 World Cup India, 2017.

Sitharaman, in her Budget speech, had said that exemptions from customs duty have been given in public interest from time to time. However, a number of these have outlived their utility or have become outdated. Many such exemptions are being withdrawn after review and the rest shall be comprehensively reviewed by September.

“I propose to crowdsource suggestions for such reviews. Suggestions will also be invited in respect of the customs laws and procedures for aligning them with the needs of changing times and ease of doing business,” she had said.

Accordingly, suggestions have now been invited on the need for review of a particular notification, amendment in wording of the notification for bringing clarity, consolidation of similar entries, extent of use of the notification, etc. It has been clarified that requests for routine, merit-based change of duty rates are considered usually as part of the Budget proposals and they are not covered under this review exercise and the same need not be furnished.

Stakeholders have also been urged to give suggestions in respect of review of the customs laws and procedures. Such an exercise aims at aligning laws and procedures with the needs of changing times and ease of doing business.

Categorisation of goods

Prior to this year’s Budget, the Finance Ministry took a review exercise to weed out customs duty exemptions that are redundant, outdated or have outlived their utility. Subsequently, it was decided to withdraw 80 exemptions by making suitable amendment or revoking relevant notifications. The Budget listed five categories of goods for withdrawal of exemption or concessional rates.

The first category related to agro and animal-based products and included tuna bait, skimmed milk and certain milk products, sugarbeet seeds, raw sugar, certain alcoholic beverages, whey and isolated soya protein, soya fibre, etc. The second category was items of metals comprising lead bars, rods and wire, zinc tubes, pipes and tube, tin plates, sheets and strips. The third group named machinery and included machinery imported for use in certain projects such as specified electricity generation projects, specified Metro projects, certain other specified purposes and specified goods required for construction of roads.

The fourth group was electronic items and listed copper and articles thereof used in the manufacture of specified electronic items, parts for manufacture of printers, CD writers, MP3 or MP4 or MPEG 4 players, pre-recorded cassettes, audio cassettes, colour television tubes, etc. The fifth category was miscellaneous and included peanut butter, preserved potatoes, instant print film, exposed cinematographic films, etc.

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