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Government May Withdraw Custom Duty on 97 Items

Government May Withdraw Custom Duty on 97 Items

The government has identified around 97 different products for review of customs duty exemptions. Suggestions are invited from trade and industry bodies in this regard. The Central Board of Indirect Taxes has sought suggestions on August 10. The products identified include fabrics, games/sports accessories, magnetrons for microwave manufacturing, PCB parts, set-up boxes, routers, broadband modems, contraceptives and artificial kidneys.

Finance Minister Nirmala Sitharaman had said in her budget speech for 2020-21 that the existing customs notifications would be further reviewed after a thorough deliberation. The idea behind this was that it would encourage local production and slow down imports. Along with this, access to raw materials is also a goal. Earlier, the government had abolished about 80 such outdated concessions last year. The Finance Minister had said that the government is reviewing about 400 old exemptions. The government is going to review it afresh from 1 October 2021.

The Budget for 2021-22 had raised import duties on various electronic items along with cotton, plastics, leather, gems and jewellery, but slashed duties on some key raw materials such as naphtha to reduce costs for domestic producers.

The government may do away with the exemption on foreign imported Atlantic salmon, hazelnut, durian and some sweet foreign biscuits. The government has proposed to remove custom exemptions on 97 such imported items. On the one hand, the prices of imported goods may increase from the government. At the same time, the domestic industry is also expected to benefit immensely from this.

This is also expected to help the stimulus package given to automobiles, electronic and technology products and telecom products. The government wants to review over 400 old customs duty exemptions this year and introduce a revised customs duty structure from October.

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