The Indian government may propose a rejig in customs duty on range of imported items ranging from consumer electronics to medical devices to support domestic manufacturing and help Indian industry become the part of global value chain.
According to people in the know, the government may take a call on extending the custom duty exemption on at least 30 items which is set to expire in September 22025.
The Finance Ministry is of the view that rejig in duties should be aligned with Government' Make in India focusing on value addition within the country.
“Imported finished goods may see revision in custom duties as government is considering phasing out a conditional exemption to these imported items, a person in the know told NDTV Profit.
Meanwhile, the government may propose lowering the custom duties on parts, inputs materials used in manufacturing such items. Medical equipment imported from Vietnam such as blood pressure machines, oximeter etc. could see change in duty and may be lowered, person added.
The move in line with the comprehensive review of the customs duty rate structure to rationalise and simplify it for ease of trade, removal of duty inversion, and reduction of disputes.
It is noteworthy that duty inversion happens when finished products are subject to lower import duty than the inputs needed to make them. A review may lead to reducing the duty slabs to maximum five from current 12-13 slabs. It will also rationalise the different rates applied across sector.
In the July Budget, Finance minister Nirmala Sitharaman had announced the change in customs duty on a plethora of products including mobile phones and electronics, gold, silver, critical minerals, leather and certain chemicals to support local manufacturing.
Besides, the government also discussed introducing a tax settlement scheme for customs to foster ease of doing business.
The government had in the past announced such tax settlement schemes for excise and service tax matters. An industry estimation suggests that over 40,000 cases were pending in various courts and tribunals pertaining to customs duty alone.
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