Union Budget 2023: The government on Wednesday reduced customs duty on import of certain parts and inputs like camera lens, and extended the concessional duty on lithium-ion cells for batteries for another year.
Reportedly, this move will promote domestic manufacturing of mobile phones.
Finance minister Nirmala Sitharaman also extended the customs duty exemption to the import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles. These announcements were made by the minister in her budget speech.
The finance minister revised upwards the National Calamity Contingent Duty (NCCD) on specified cigarettes by about 16 per cent. According to a report by the news agency PTI, it was last revised three years ago.
Sitharaman proposed to exempt excise duty on GST-paid compressed biogas contained in it to avoid cascading of taxes on blended compressed natural gas.
“To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles,” Sitharaman said in her budget 2023-24 speech.
Referring to mobile productions, she said, as a result of various initiatives of the government, including the phased manufacturing programme, mobile phone production in India has increased from 5.8 crore units valued at about Rs 18,900 crore in 2014-15 to 31 crore units valued at over Rs 2,75,000 crore in the last financial year.
“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,” she announced.
The minister increased the duties on articles made from dore and bars of gold and platinum to enhance the duty differential. The customs duties on dore and bars of gold and platinum were increased earlier this fiscal. She also proposed to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum.
Meanwhile, the Union budget 2023-24 also proposed to nullify the basic customs duty (BCD) on seeds used in the manufacturing of lab grown diamonds from the current 5 per cent.
Sitharaman stated that India contributed about three-fourths of the global turnover by value in cutting and polishing the natural diamonds industry. With the depletion in deposits of natural diamonds, the industry is moving towards lab grown diamonds.
To facilitate the availability of raw materials for the steel sector, the finance minister proposed to continue the exemption from BCD on raw materials for manufacturing of CRGO steel, ferrous scrap and nickel cathode.
She also announced continuation of the concessional BCD of 2.5 per cent on copper scrap to ensure the availability of raw materials for secondary copper producers who are mainly in the MSME sector.
The government has increased BCD rate on compounded rubber from 10 per cent to 25 per cent or Rs 30 per kilogram, whichever is lower, at par with that on natural rubber other than latex, to curb circumvention of duty. Also, the BCD has been increased on electric kitchen chimney from 7.5 per cent to 15 per cent. There is a reduction in BCD on heat coils from 20 per cent to 15 per cent.
This change would rectify inversion of duty structure and encourage manufacturing of electric kitchen chimneys, the minister said.
To support the ethanol blending programme and facilitate India’s endeavour for energy transition, the minister announced exemption of BCD on denatured ethyl alcohol. She also reduced BCD on acid grade fluorspar from 5 per cent to 2.5 per cent to make the domestic fluorochemicals industry competitive.
The BCD on crude glycerin for use in manufacturing of epichlorohydrin has also been reduced from 7.5 per cent to 2.5 per cent, as per PTI.
(With inputs from PTI)