Finance Minister Nirmala Sitharaman Announces New Customs Duties in Budget 2024-25
In her budget speech in Parliament, Finance Minister Nirmala Sitharaman outlined new customs duty proposals aimed at supporting domestic manufacturing, enhancing local value addition, promoting export competitiveness, and simplifying taxation.
Key Changes in Customs Duties
New customs duty rates are proposed for various commodities, including life-saving medicines and rare earth minerals. Notably, three cancer medicines—Trastuzumab, Deruxtecan, Osimertinib, and Durvalumab—are now exempt from customs duties. Additionally, duties on x-ray tubes and flat panel detectors for medical x-ray machines have been reduced.
Mobile Phones and Electronics
The Finance Minister highlighted a significant increase in domestic production and exports of mobile phones over the past six years. To benefit consumers, the basic customs duty (BCD) on mobile phones, mobile PCBA, and mobile chargers has been reduced to 15 percent.
Critical Minerals and Renewable Energy
Full exemptions on customs duties for 25 critical minerals were announced, benefiting sectors like space, defense, telecommunications, high-tech electronics, nuclear energy, and renewable energy. The list of exempted capital goods for manufacturing solar cells and panels has also been expanded.
Seafood and Leather Exports
To enhance seafood exports, the BCD on certain broodstock, polychaete worms, shrimp, and fish feed has been reduced to 5 percent. Various inputs for shrimp and fish feed manufacturing are now exempt from customs duties. Similar reductions and exemptions were announced for leather raw materials to boost exports in the leather and textile sectors.
Precious Metals and Industrial Materials
Customs duties on gold and silver have been reduced from 15 percent to 6 percent, and on platinum from 15.4 percent to 6.4 percent. BCD on ferro nickel and blister copper has been removed to lower production costs for steel and copper.
Future Plans
The Finance Minister announced a comprehensive review of the customs duty rate structure over the next six months to simplify and rationalize it for ease of trade, removal of duty inversion, and reduction of disputes.
Doubts Revealed
Finance Minister -: The Finance Minister is a government official in charge of managing the country’s money and economic policies. In India, this role is currently held by Nirmala Sitharaman.
Nirmala Sitharaman -: Nirmala Sitharaman is an Indian politician serving as the Finance Minister of India. She is responsible for presenting the Union Budget and managing the country’s finances.
Customs Duties -: Customs duties are taxes that the government charges on goods coming into or going out of the country. These taxes help protect local businesses and generate revenue for the government.
Union Budget -: The Union Budget is an annual financial statement presented by the Finance Minister. It outlines the government’s revenue and expenditure for the upcoming year.
Domestic Manufacturing -: Domestic manufacturing refers to the production of goods within a country. Supporting it means encouraging businesses to make products locally rather than importing them.
Exports -: Exports are goods and services that a country sells to other countries. Increasing exports can help a country’s economy grow.
Exemptions -: Exemptions mean that certain goods are not subject to customs duties. This can make these goods cheaper and more accessible.
Cancer Medicines -: Cancer medicines are drugs used to treat cancer. Exempting them from customs duties can make them more affordable for patients.
Renewable Energy -: Renewable energy comes from natural sources that can be replenished, like solar or wind power. Promoting it helps reduce pollution and reliance on fossil fuels.
Customs Duty Structure -: The customs duty structure is the system of rules and rates that determine how much tax is charged on different goods. Reviewing it means checking and possibly changing these rules to make them better.
