India’s Finance Minister yesterday (23rd of July) presented Union Budget 2024 with many changes across sectors.
The proposals relating to customs duties, as per the speech of the Finance Minister, intend to support domestic manufacturing, deepen local value addition, promote export competitiveness, and simplify taxation, while keeping the interest of the general public and consumers surmount.
A comprehensive review of the rate structure is also proposed over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes.
Some of the important changes are highlighted below:
- Section 28 DA of the Customs Act, 1962 is being amended to enable the acceptance of different types of proof of origin provided in trade agreements (FTAs). This will align the said section with trade agreements, which provide for self-certification.
- Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 have been amended to insert a provision for New Shipper Review. This is effective from 24 July 2024.
- Time-period of duty-free re-import of goods (other than those under export promotion schemes) exported out from India under warranty has been increased from 3 years to 5 years, further extendable by 2 years. Refer Notification No. 39/2024-Cus. amending Notification No. 45/2017-Cus.
- Aircrafts and vessels imported for maintenance, repair and overhauling can now be re-exported within 1 year (instead of 6 months), further extendable by 1 year. Refer Notification No. 38/2024-Cus. amending Notification No. 153/94-Cus.
- BCD has also been reduced on shea nuts, goods relating to aquafarming & marine exports, 27 critical minerals, Ferro Nickel, Blister Copper, Ammonium Nitrate, certain goods for textile and leather sector, 3 cancer drugs, precious metals, certain medical equipment, certain specified goods of IT and Electronics sector (covering mobile phone, charger/adapter, PCBA, etc.), capital goods for use in manufacture of solar cells or solar modules, and capital goods for petroleum exploration operations
- BCD exemption has been extended till 31 March 2026 for Ferrous scrap and certain specified raw materials for manufacture of CRGO steel.
- Tariff rate of BCD has been increased to 25% for Poly vinyl chloride (PVC) flex films. This is effective from 24 July 2024
- Tariff rate of BCD has been increased to 150% for Laboratory Chemicals. This is effective from 24 July 2024.
- Tariff rates of BCD are also being revised for roasted nuts and seeds, and other nuts otherwise prepared or preserved, both including arecanuts, with effect from 1 October 2024, to 150%.
- BCD has been increased on Printed Circuit Board Assembly (PCBA) of specified telecom equipment, from 10% to 15%.
- Export duty on raw skins, hides & leather is being simplified and rationalized.