In Union Budget 2021, as the Finance Minister Nirmala Sitharaman presented India’s first paperless budget in history using a 'Made In India' tab, she aimed to give a boost to the economy that has been forecast to grow at 11% for the coming fiscal year. Addressing a question in the press conference, FM Nirmala Sitharaman said the Agriculture Infrastructure and Development Cess (AIDC) will not result in price increase for end users, higher cess will be adjusted with lower customs duty.
The current Basic Customs Duty (BCD) on gold and silver is 2.5%. In July 2019, the duty was raised to 10%, leading to a sharp increase in prices of precious metals. The BCD for gold and silver has been rationalised to bring it closer to previous levels.
An agriculture cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel has been imposed.
Here’s a list of what is getting cheaper and what is getting expensive this year.
Electronics items
Mobile phones
Mobile chargers
Gems
Leather shoes
LED lights
Solar inverters and lamps
Petrol
Diesel
Iron
Steel
Nylon clothes
Copper items
Insurance
Electricity
Steel utensils
It is likely that refrigerators and air conditioners may get more expensive as the BCD on compressors have been increased from 12.5% to 15%, while customs duty on solar inverters has increased from 5% to 20% and solar lanterns or solar lamps from 5% to 15%.
“We have already acknowledged that solar energy has huge promise for India. To build up domestic capacity, we will notify a phased manufacturing plan for solar cells and solar panels. At present, to encourage domestic production, we are raising duty on solar inverters from 5% to 20%, and on solar lanterns from 5% to 15%,” said the Finance Minister.
BCD on inputs and parts of LED lights or fixtures including LED Lamps has been increased from 5% to 10%. BCD on leather goods like wet blue chrome tanned leather, crust leather, finished leather of all kinds, including their splits and slides has been increased from nil to 10%.
On gems, jewellery, and cut and polished cubic zirconia, BCD has been increased from 7.5% to 15% while the same on synthetic cut and polished stones has been hiked from 7.5% to 15%.
As for the automobile sector, specific auto parts like ignition wiring sets, safety glass, parts of signaling equipment, etc. will have an increased BCD from 7.5% or 10% to 15%.
Sitharaman reduced the customs duty on semis, flux and long products of non-alloy, alloy and stainless steel. Customs duty rates on chemicals have been calibrated to “encourage domestic value addition and to remove inversions.”
Apart from other items, customs duty on naphtha has been reduced to 2.5% to correct inversion. Naphtha is a flammable liquid, produced from natural gas condensates, petroleum distillates, and the distillation of coal tar and peat. In some industries, it may be used in crude oil and kerosene.
Those who wish to buy a car or a motorcycle may have to shell out more as the government on Monday announced to hike customs duty on some auto parts from 10 per cent to 15 per cent.
The 5 per cent increase in duty applies to safety glass comprising toughened (tempered) or laminated glass, parts of electrical lighting and signaling equipment, windscreen wipers, defrosters and demisters (of a kind used for cycle or motor).
Other automobile parts that will see an extra 5 per cent duty hike include ignition wiring sets and other wiring sets of a kind used in vehicles, aircraft or ships, instrument panel clocks and clocks of a similar type for vehicles, aircraft, spacecraft or vessels.