Budget 2025: EV Battery Manufacturing, Medicines, To Get Indirect Tax Relief
The measures will be varied across other sectors, too, like industrial goods and leather industry.
Finance Minister Nirmala Sitharaman said that the Union government will be undertaking indirect tax measures across various sectors, including EV battery manufacturing. The measures will be varied across other sectors, too, like medicines, industrial goods and leather industry.
While proposing indirect tax measures to support domestic manufacturing, Sitharaman said that cobalt powder and waste, scrap of lithium-ion battery, lead, zinc and 12 more critical minerals will be exempted from basic customs duty.
"Thirty-five additional goods for EV battery manufacturing, and 28 additional goods for mobile phone battery manufacturing will be added to list of exempted capital goods," she said.
In her Feb. 1 speech while presenting the Union Budget, Sitharaman also said that customs tariff structure will be rationalised for industrial goods. Seven tariff rates were proposed to be removed over and above the seven rates already removed in the 2024 budget. She also said that social welfare surcharge will be exempted on 82 tariff lines that are subject to a cess.
She added that importing medicines will become cheaper as 36 "lifesaving" drugs and medicines will be added to the list of medicines fully exempted from basic customs duty.
"37 more medicines and 13 new patient assistance programs will be fully exempted from basic customs duty, where they are supplied free of cost to patients," she explained.
Other indirect tax measures to promote exports included the exemption of wet blue leather from BCD, and the reduction of duty on frozen fish paste to 5% from the existing 30%, for manufacture and export of its analogue products, the budget highlighted.
Sitharaman also tabled indirect tax measures for trade facilitation. "Time-limit of two years will be fixed, extendable by a year, for finalising provisional assessment under the Customs Act," she said.
The government will also be incentivising voluntary compliance, with new provisions enabling importers and exporters.
