Budget 2012 - Amendments related to Customs Duty

[Swati Dodhi]

Union Budget 2012- 13

 

CUSTOMS DUTY –

Union Budget 2012-13 presented by the Finance Minister Shri Pranab Mukherjee

Customs and Central excise are estimated to result in a net revenue gain of Rs. 27,280 crore for a full year.

Non-agricultural goods- No change is proposed in the peak rate of customs duty of 10 per cent . Barring a few individual items, the rates below the peak are also being retained.

Agriculture goods -

Horticultureandfloriculture - Concessional basic customs duty of 5 per cent Projectimportbenefittogreenhouseandprotectedcultivationfor

Sugarcane planter, root or tuber crop harvesting machine and rotary tiller and weeder - Reduce basic customs duty from 7.5 per cent to 2.5 per cent

Specifiedcoffeeplantationandprocessingmachinery - Basic customs duty from 7.5 per cent to 5 per cent

Water soluble fertilisers and liquid fertilisers, other than urea - 7.5 per cent to 5 per cent and from 5 per cent to 2.5 per cent respectively

Such all reductions of duty in Agriculture Sector will lead to upliftment of the sector leading to strong and stable economy.

Fertiliser projects -Exempted from basic customs duty of 5 per cent on Imports of equipment for initial setting up or substantial expansion of fertilizer projects for a period of three years up to March 31, 2015. Suc exemption will encourage more imports leading to more fertilizer projects to f;flourish in the economy strengthening the industry base.

Steam coal - Full exemption from basic customs duty and a concessional CVD of 1 per cent to Steam coal for a period of two years till March 31, 2014. This was an initiative to uplift the domestic producers of thermal power who were under pressure due to high prices of coal . This will lead to eradication of weakness crept in the Coal Sector.

Machinery and instruments for surveying and prospecting – Coal MiningReduce from 10 per cent or 7.5 per cent to 2.5 per cent. Such reduction will lead to better surveying and prospecting for minerals as essential for improving the productivity and efficiency of our mining sector.

Full exemption from basic customs duty is being provided to coal mining projects.

Indian Railways - From 10 per cent to 7.5 per cent - Indian Railways are undertaking two major projects for passenger safety and better service delivery over the period of Five Years . Such reduction in customs duty on equipment required for their implementation of project will provide a good finacial help.

Parts of aircraft and testing equipment - Full exemption from basic Custom Duty on the parts of aircraft and testing equipment imported for third-party Maintenance, Repair and Overhaul (MRO) of civilian aircraft Such exemption will help India to actualize its potential for establishing itself as a hub of such activities.

Plant and machinery imported for setting up or substantial expansion of iron ore pellet plants or iron ore beneficiation plants - from 7.5 per cent to 2.5 per cent . Such reduction will help to encourage enrichment of low-grade iron ore.

Steel sector - To reduce basic customs duty on from 7.5 per cent to 5 per cent on coating material for manufacture of electrical steel and from 2.5 per cent or 7.5 per cent to Nil on nickel ore and concentrate and nickel oxide/ hydroxide. Such Reduction will give a growth in the Steel sector which will contribute highly in the growth of Indian Economy.

Enhance export duty on chromium ore from `3000 per tonne to 30 per cent ad valorem and basic customs duty on non-alloy, flat-rolled steel from 5 per cent to 7.5 per cent.

Textile industry - Fully exempt as compared to 5 per cent especially on the weaving sector, as upliftment is need to be brought in this sector . Full exemption from basic duty is being accorded to automatic silk reeling and processing machinery as well as its parts restrictIing these exemptions only to new textile machinery.

To reduce basic customs duty on wool waste and wool tops from 15 per cent to 5 per cent, basic customs duty on Titanium dioxide from 10 per cent to 7.5 per cent and full exemption from to aramid yarn and fabric used for the manufacture of bullet proof helmets

MSME sector -Reduce basic customs duty to 2.5 per cent with concessional CVD of 6 per cent on specified parts, components and raw materials for the manufacture of some disposables and instruments used for the production of low-cost medical devices. This will help this sector to grow and strenthen.

Full exemption from basic customs duty and CVD to specified raw materials for the manufacture of coronary stents and heart valves. These concessions would be subject to actual user condition.

Waste paper, LCD and LED TV panels, and parts of memory card for mobile phones- Full exemption from basic customs duty.

Bicycles from 10 per cent to 30 percent and 10 per cent to 20 per cent on bicycle parts – These are those sectors that are highly labour- intensive and produce items of mass consumption such reduction will help this sector to grow more and benefit more.

Specified life-saving drugs/ vaccines -Extend concessional basic customs duty of 5 per cent .This will lead to more imports of drugs and help more to cure the disease and the treatment or prevention of ailments such as HIV-AIDS, renal cancer, etc.

Soya food products - Custom Duty on all processed soya food products is being reduced to 10 per cent. This will welcomed by the women as Protein deficiency among women and children is one of the most common sources of malnutrition in India and with this move to reduce the Custom and Excise Duty will strengthen the Health of the children and women.

Iodine - Reduced Custom Duty of 2.5 per cent on iodine. As the consumption of iodised salt prevents iodine deficiency and related diseases such reduction in excise will help to provide the Iodine in cheaper prices which will help to avail it by poor people also. This will give a more and healthy children to our Economy.

Probiotics- Reduce the basic customs duty on this item from 10 per cent to 5 per cent.It will be beneficial to cure as probiotics are a cost-effective means of combating bacterial infections leading to a healthy economy.

Coating chemical used for compact fluorescent lamp –Fully Exempt the coating chemical used for compact fluorescent lamp leading to encouraging the consumption of energy-saving devices

Manufacture of hybrid vehicles- Fully Exempt from basic customs duty and special CVD

Gold and other precious metals - Increase basic

customs duty on standard gold bars, gold coins of purity exceeding 99.5 per cent and platinum from 2 per cent to 4 per cent .

On non-standard gold from 5 per cent to 10 per cent.

On gold ore, concentrate and dore bars for refining is being enhanced from 1 per cent to 2 per cent.

Cut and polished, coloured gem stones at par with diamonds - Impose basic customs duty of 2 per cent to prevent round-tripping.

Crude petroleum oil - Increase the rate of cess to `4,500 per metric tonne. As a measure of indexation, such increase of Cess is required as crude petroleum oil produced in India attracts a cess of `2,500 per metric tonne under the Oil Industries Development Act. This rate was last revised in Budget 2006-07.

Completely Built Units of large cars/ MUVs/ SUVs - Increase to 75 per cent ad valorem as compared to 60 percent Such units are those having engine capacity above a prescribed threshold and whose value exceeds US dollar 40,000 per vehicle are permitted for import without type approval.

Baggage allowance for Indians travelling abroad - Increase the duty-free allowance for eligible passengers of Indian origin from `25,000 to `35,000 and for children of up to 10 years from `12,000 to `15,000.