Budget cuts Customs duty on slew of items, assures rationalisation of GST

Finance Minister Nirmala Sitharaman on Tuesday tweaked the basic customs duty (BCD) on a slew of items such as mobile phones, gold, critical minerals, telecom equipment, marine products, among others, to give a leg up to domestic manufacturing and boost export competitiveness. At the same time the FM assured further rationalisation of the goods and services tax (GST) regime.

“My proposals for customs duties 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 paramount,” Sitharaman said while announcing the Union Budget 2024-25.

On GST particularly, she said: “It has decreased tax incidence on the common man, reduced compliance burden and logistics cost for trade and industry; and enhanced revenues of the central and state governments. The Budget also proposes several amendments in the central GST Act in line with the recommendations of the GST Council.”

The finance ministry will also do a comprehensive review of the rate structure over the next six months to “rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes”.

 

For instance, in the interest of consumers, the government has proposed to reduce the import duty on mobile phone, mobile PCBA and mobile charger to 15 per cent from 20 per cent. The decision comes against the backdrop of a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, a clear signal that the mobile phone industry has matured.

Gems and Jewellery Export Promotion Council (GJEPC) Chairman Vipul Shah said the reduction in import duties on gold and silver to 6 per cent and platinum to 6.4 per cent is a major boost for the industry. The move will enhance affordability for consumers and competitiveness for the manufacturing sector by releasing working capital.

Source:: Business Standard,  dated 24/07/2024.