Watch | Budget 2023 | What’s cheaper and what’s costlier?
Customs duties on articles made from bars of gold and platinum have been increased.
| Photo Credit:
PTI
With a view to promoting exports, boosting domestic manufacturing, and enhancing value addition, the Union Budget 2023-24 has proposed a number of changes to the Customs Duty regime which is likely to make mobile phones and TVs cheaper and a certain class of automobiles, including EVs, as well as toys and bicycles dearer.
Finance Minister Nirmala Sitharaman said, “a simplified tax structure with fewer tax rates helps in reducing compliance burden and improving tax administration. I propose to reduce the number of Basic Customs Duty (BCD) rates on goods, other than textiles and agriculture, from 21 to 13.” Consequently, there would be “minor changes in BCD, cesses and surcharges on some items, including toys, bicycles, automobiles and naphtha,” Ms. Sitharaman said.
A reduction in mobile phone prices is likely on account of BCD on camera lens and its inputs/parts, used in manufacture of camera module of mobile phone, made nil from existing 2.5%. It has been decided to continue concessional duty on lithium-ion cells for batteries for another year. “The proposals are aimed at deepening domestic value addition in manufacture of mobile phones,” the FM said.
“Similarly, to promote value addition in manufacture of televisions, I propose to reduce BCD on parts of open cells of TV panels to 2.5% [from the existing 5%],” she said.
In another Indirect Tax proposal, she said towards rectifying inversion of duty structure and encouraging manufacturing of electric kitchen chimneys, BCD on electric kitchen chimney was being increased to 15% from 7.5%, while the levy on heat coils for the appliance is getting reduced from 20% to 15%.
For bicycles, the new rate is 35% as against existing 30%; for toys and parts of toys, other than parts of electronic toys, it will be 70% (60%). BCD on naphtha has been increased from 1% to 2.5%.
The duty on Styrene and Vinyl Chloride is being increased from 2 to 2.5%. As an impetus to green mobility, the duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in EVs, the FM said.
The Budget also proposed exemption from the levy on vehicles, specified automobile parts, sub-systems and tyres imported by notified testing agencies for the purpose of testing/certification.
Denatured ethyl alcohol, which finds applications in the chemical industry, is being exempted from BCD.
Here’s is a list of items that will become cheaper and costlier.
What’s cheaper
- Mobile phones and TV sets manufactured in India
- Denatured ethyl alcohol
- Acid grade fluorspar
- Shrimp feed
- Lab-grown diamonds
- Fish lipid oil used in manufacturing aquatic feed
- Machinery for manufacturing lithium ion cell to be used in electric vehicles
- Raw materials for manufacture of CRGO Steel, ferrous scrap and nickel cathode
What’s dearer
- Fully imported cars, including electric vehicles (EV)
- Kitchen chimney
- Imported bicycles and toys
- Articles made of gold, platinum
- Imitation jewellery
- Silver dores, bars, articles
- Copper scrap
- Compounded rubber
- Cigarettes
