For the layperson, the highlight of the Union Budget has always remained on what all have become cheaper and which of them has got costlier to buy.
This year too the first full budget of Prime Minister Narendra Modi government’s third term in office has been no exception.
Finance Minister Nirmala Sitharaman as part of her Budget presentation proposed a host of tweaks in basic customs duty (BCD) for various products or items that are critical for manufacturing or for day-to-day needs. In some cases prices were raised to make domestic manufacturing robust.
Relief on import of drugs and medicines:
To provide relief to patients, particularly those suffering from cancer, rare diseases and other severe chronic diseases, Sitharaman proposed to add 36 lifesaving drugs and medicines to the list of medicines fully exempted from Basic Customs Duty (BCD).
She also proposed to add six lifesaving medicines to the list attracting concessional customs duty of 5 per cent. Full exemption and concessional duty will also respectively apply on the bulk drugs for manufacture.
Specified drugs and medicines under Patient Assistance Programmes run by pharmaceutical companies are fully exempt from BCD, provided the medicines are supplied free of cost to patients.
The minister has now proposed to add 37 more medicines along with 13 new patient assistance programmes.
Support to domestic manufacturing and value addition:
In the July 2024 Budget, the government had fully exempted BCD on 25 critical minerals that are not domestically available.
The government had also reduced BCD on two other such minerals to provide a major fillip to their processing especially by MSMEs (micro, small and medium enterprises).
Now, the government proposed to fully exempt cobalt powder and waste, the scrap of lithium-ion battery, Lead, Zinc and 12 more critical minerals.
“This will help secure their availability for manufacturing in India and promote more jobs for our youth,” the FM said.
Textiles:
To promote domestic production of technical textile products such as agro-textiles, medical textiles and geo textiles at competitive prices, the Finance Minister has proposed to add two more types of shuttle-less looms to the list of fully exempted textile machinery.
She also proposed to revise the BCD rate on knitted fabrics covered by nine tariff lines from “10 per cent or 20 per cent” to “20 per cent or Rs 115 per kg, whichever is higher”.
Electronic goods:
In line with ‘Make in India’ policy, and to rectify the inverted duty structure, she proposed to increase the BCD on Interactive Flat Panel Display (IFPD) from 10 per cent to 20 per cent and reduce the BCD to 5 per cent on Open Cell and other components.
In the 2023 -24 Budget, for the manufacture of Open Cells of LCD/LED TVs, the government has reduced the BCD on parts of Open Cells from 5 per cent to 2.5 per cent .
“To further boost the manufacture of such Open Cells, the BCD on these parts will now stand exempted.”
Lithium ion battery:
To the list of exempted capital goods, she proposed to add 35 additional capital goods for EV battery manufacturing, and 28 additional capital goods for mobile phone battery manufacturing.
“This will boost domestic manufacture of lithium-ion battery, both for mobile phones and electric vehicles,” she said.
Shipping Sector
Considering that shipbuilding has a long gestation period, she proposed to continue the exemption of BCD on raw materials, components, consumables or parts for the manufacture of ships for another ten years.
“I also propose the same dispensation for ship breaking to make it more competitive,” she said.
Telecommunication:
To prevent classification disputes, the government has proposed to reduce the BCD from 20 per cent to 10 per cent on Carrier Grade ethernet switches to make it at par with Non-Carrier Grade ethernet switches.
Export Promotion
Handicraft Goods:
To facilitate exports of handicrafts, the government proposed to extend the time period for export from six months to one year, further extendable by another three months, if required.
Besides, she also proposed to add nine items to the list of duty-free inputs.
Leather sector:
The government proposed to fully exempt BCD on Wet Blue leather to facilitate imports for domestic value addition and employment. She also proposed to exempt crust leather from 20 per cent export duty to facilitate exports by small tanners.
Marine products:
To enhance India’s competitiveness in the global seafood market, the government proposed to reduce BCD from 30 per cent to 5 per cent on Frozen Fish Paste (Surimi) for manufacture and export of its analogue products. She also proposed to reduce BCD from 15 per cent to 5 per cent on fish hydrolysate for manufacture of fish and shrimp feeds.
Domestic MROs for Railway Goods:
In July 2024 Budget, to promote development of domestic MROs (maintenance, repair and overhaul) for aircraft and ships, the government extended the time limit for export of foreign origin goods that were imported for repairs, from 6 months to one year and further extendable by one year.
“I now propose to extend the same dispensation for railway goods,” she said.
In Budget 2024-25 too, the government reduced the number of customs duty rates.
(This news report is published from a syndicated feed. Except for the headline, the content has not been written or edited by OpIndia staff)
