New Delhi: Mobile phones and TV sets manufactured in India would become cheaper with Finance Minister Nirmala Sitharaman announcing cuts in basic customs duty (BCD) on import of their components. However, smokers would have to pay more as the government has increased taxes.
Imported cars, including electric vehicles, and those assembled in India with imported parts will also become costlier with increased customs duty.
Nirmala Sitharaman in her Budget speech Wednesday proposed an increase in BCD on several items to ‘promote exports, boost domestic manufacturing, enhance domestic value addition, encourage green energy and mobility’.
Customs duty on vehicles in completely built units (CBUs) costing less than USD 40,000 or with engine capacity less than 3,000 cc for petrol-run vehicles and less than 2,500 cc for diesel-run vehicles has been raised from 60 per cent to 70 per cent, as per the Budget document.
Similarly, customs duty on electrically operated vehicles in CBU form, other than with cost, insurance and freight (CIF) value of more than USD 40,000, has also been raised to 70 per cent from 60 per cent.
Besides, BCD on import of bicycles is also being increased from 30 per cent to 35 per cent. BCD for toys and its parts is also hiked from 60 per cent to 70 per cent.
“The BCD is being increased on styrene, vinyl chloride monomer, toys and parts of toys (other than parts of electronic toys), bicycles, automobiles in SKD and CBU form, silver bar, silver dore and naphtha,” said the budget notification.
The government has also decided to increase Agriculture Infrastructure and Development Cess (AIDC) on silver bar from the existing 2.5 per cent to 5 per cent and 2.5 per cent to 4.35 per cent on silver dore.
However, the government has provided customs duty exemption to import of specified capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles as available for the manufacture of lithium-ion cells for batteries used in mobile handsets.
“To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles,” said Sitharaman in her Budget speech.
In order to deepen domestic value addition in the manufacture of mobile phones, the government has proposed exempting BCD on the camera lens for the camera module, and input/sub-parts for lens of the camera module of mobile phone is being reduced from 2.5 per cent. It has also proposed to reduce BCD on parts for the manufacture of open cells of TV panels from 5 per cent to 2.5 per cent.
“Similarly, to promote value addition in the manufacture of televisions, I propose to reduce the basic customs duty on parts of open cells of TV panels to 2.5 per cent,” said Sitharaman.
Moreover, to encourage the manufacturing of electric kitchen chimneys, the basic customs duty on electric kitchen chimney is proposed to increase from the existing 7.5 per cent to 15 per cent.
Besides, BCD on denatured ethyl alcohol, used in the chemical industry, has been proposed to be exempt from the present 5 per cent.
“This will also support the Ethanol Blending Programme and facilitate our endeavour for the energy transition. BCD is also being reduced on acid-grade fluorspar from 5 per cent to 2.5 per cent to make the domestic fluorochemicals industry competitive. Further, BCD on crude glycerin for use in the manufacture of epicholorhydrin is proposed to be reduced from 7.5 per cent to 2.5 per cent,”” the Finance Minister said.
The government has also increased National Calamity Contingent Duty (NCCD) on specified cigarettes, which were last revised three years ago. “This is proposed to be revised upwards by about 16 per cent,” Sitharaman said while presenting the budget.
To encourage marine product exports and help farmers from coastal states, it has been proposed to reduce duty on certain ingredients/inputs such as fish meal, krill meal, fish lipid oil, Algal Prime – used in the manufacture of aquatic feed.
It has also exempted 30 per cent BCD on import of warm blood horse by sportsperson of outstanding eminence for training purpose.
These changes will be effective from February 2, 2023, said a notification.
Here are the lists of products that will cost more while some will become cheaper
Items which will become costlier:
Articles made from gold bars
Cigarettes
Imitation Jewellery
Silver
Electric kitchen chimney
Imported bicycles and toys
Electronic vehicle imports
Things that will become cheaper:
Parts for mobile phones
Parts for TV panels
Machinery for lithium ion batteries
Home-made toys
Raw materials for EV industry
This year’s Budget holds much significance as India will go to the polls in April-May next year. The Budget session of the Parliament began Tuesday with the President Droupadi Murmu’s address, followed by tabling of the Economic Survey for 2022-23. The formal exercise to prepare the annual Budget for the next financial year (2023-24) commenced October 10.
The Economic Survey released Tuesday said India’s GDP is expected to grow in the range of 6 to 6.8 per cent in the coming financial year 2023-24. This is in comparison to the estimated 7 per cent this fiscal and 8.7 per cent in 2021-22. The Economic Survey said that India’s economic recovery from the Covid-19 pandemic is complete and the country will see a robust growth, the fastest among the major economies of the world.