Finance Minister Nirmala Sitharaman has made a slew of changes to the customs duty policy in her Union Budget speech for financial year 2021-2022. The duty for gold and silver will be reduced to 7.5% from 12.5% to account for sharp increase in prices.
“Gold and silver presently attract a basic customs duty of 12.5%. Since the duty was raised from 10% in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, we are rationalizing custom duty on gold and silver,” the FM said.
Here’s a list of items that will see an increase in customs duty
Some parts of mobiles will move from ‘nil’ rate to a moderate 2.5%.
Solar inverters from 5% to 20%
Solar lanterns from 5% to 15%
Steel screws and plastic builder wares from 0% to 15%
Finished synthetic gemstones
Raw silk and silk yarn increased from 10% to 15%.
Prawn feed increased from 5% to 15%.
Cotton custom duty to increase from 0 to 10%
Here’s a list of items that will see a decrease in customs duty
Copper scrap from 5% to 2.5%
Semis, flat, and long products of non-alloy, alloy, and stainless steels uniformly to reduce to 7.5% on
Caprolactam, nylon chips and nylon fiber & yarn to reduce to 5%.
Naptha to reduce to 2.5%
As part of her speech, the Finance Minister said, “Our Customs Duty Policy should have the twin objective of promoting domestic manufacturing and helping India get onto the global value chain and to export better. The thrust now has to be on easy access to raw materials and exports of value-added products.”
She added, “Towards this, last year, we started overhauling the Customs Duty structure, eliminating 80 outdated exemptions. I also thank everyone who responded overwhelmingly to a crowd-sourcing call for suggestions on this revamp. I now propose to review more than 400 old exemptions this year. We will conduct this through extensive consultations, and from 1st October 2021, we will put in place a revised customs duty structure, free of distortions. I also propose that any new customs duty exemption henceforth will have validity up to the 31st March following two years from the date of its issue.”