Keeping in line with the concept of ‘Aatmnirbhar Bharat’ and ‘Make in India’, the proposals on customs duties in the Union Budget aim at boosting domestic manufacture in various sectors such as renewable energy, electronics, mobile phones, textiles and Agri products.
To this extent, the exemptions currently available under multiple notifications have been rationalised and a revised customs duty structure is proposed to be put in place with effect from 1 October, 2021. While the withdrawal of exemptions may result in increase in the cost of manufacturing in the short-run, the same may be benefit once capacities are created in the domestic market, leading to import-substitutions.
To cater to the need for improving the agricultural infrastructure and funding the same, it is proposed to introduce Agriculture Infrastructure and Development Cess (“AIDC’) on import of select goods. Suitable amendments in the rates of Customs duties have been made to ensure that AIDC does not result in increase in prices for the consumers.
JSA Viewpoint by Manish Mishra.
Manish has more than 23 years of experience in Indirect taxation across Industry, Consulting and law firms.