The customs duty tweaks in the Union Budget 2023-24 will help value-added domestic manufacturing and aid exports, stakeholders say.
The changes in the customs duties will help to provide competitiveness to manufacturing and exports besides attempting import substitution, the Federation of Indian Export Organisation (FIEO) has noted.
"The reduction in duty on denatured ethyl alcohol and crude glycerine will help the downstream users in the chemical sector while the reduction in duty on key inputs for producing shrimp feed will help the marine exports. A drop in duty on seeds for manufacturing lab-grown diamonds and R&D grant for the same will facilitate gems & jewellery exports", A Sakthivel, President, FIEO said.
Presenting the Budget in Parliament today, Union Finance Minister Nirmala Sitharaman said that the government proposes to exempt excise duty on GST-paid compressed biogas contained in it to avoid cascading taxes on blended compressed natural gas. Similarly, she proposed an extension of customs duty exemption to the import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles to provide impetus to green mobility. She also mentioned that the exemption from Basic Customs Duty on raw materials for the manufacture of CRGO Steel, ferrous scrap and nickel cathode is being continued to facilitate the availability of raw materials for the steel sector. In order to ensure the availability of raw materials for secondary copper producers in the MSME sector, the government will also continue to levy a concessional BCD of 2.5% on copper scrap.
Ashwani Mahajan, National Co-Convener of Swadeshi Jagaran Manch (SJM), an organization affiliated to Rashtriya Swayamsewak Sangh (RSS) said raising the tariff is not a one-time affair, and government review its decision any time depending on the availability of that product in the local market.
"High tariffs are needed on raw materials where India has got sufficient production capacity. In this case, the government is trying to help the value addition where we don’t have the capacity, but as and when capacity is generated with the help of production-linked incentives (PLI) and other schemes, the government can think of reviewing it," he said.
