-Samanay Biswas & Pritha Pahari | Febuary 1, 2023
The Union Budget announced exemptions on Customs and excise duties to boost exports and domestic manufacturing.
The government estimated the Union excise duties at Rs.3.39 lakh crore and Customs at Rs.2.33 lakh crore.
“If Customs duties increase, imports become costlier,” said Tanushree Roy, Director of Indirect Tax at Nangia Anderson India. “This gives a boost to domestic manufacturers.”
The exemptions reflect India’s manufacturing push, at a time when global producers are withdrawing from China.
Previously, it had launched production linked incentives (PLI) and Startup India to help domestic manufacturers.
The government has exempted import duties on certain parts of electronics like camera lens and open cells of TV and panels to increase “domestic value addition”. Concessional duty on lithium-ion cells for batteries is extended by a year to spur the electric vehicle market in the country.
The Budget has reduced the basic Customs duty on seeds used in manufacture of lab grown diamonds to enable India to become a major manufacturer.
The government also proposed to exempt excise duty on GST-paid compressed bio-gas in a bid towards green mobility. The government will exempt basic Customs duty on denatured ethyl alcohol to support the Ethanol Blending Programme and help in energy transition.
The Budget proposed to increase the duty on silver, bars and articles to align them with duty on gold and platinum which was increased earlier this fiscal. The government has levied tax on articles of precious metals and not on metal itself, said Kulraj Ashpnani, president of Indirect Tax, Dhruva advisors. This will boost the manufacturing of articles made of precious metals in the country, he added.
The National Calamity Contingent Duty (NCCD) on specified cigarettes is proposed to be revised upwards by 16 per cent.