In her first Budget speech, Finance Minister announced several changes with respect to customs duty to strike a balance between curbing unnecessary imports and serving India's interest. Presenting the Union Budget 2019, the Finance Minister proposed defence equipment not being manufactured in India to be exempted from customs duty with the objective to "securing our borders".
"Defence has an immediate requirement of modernisation and upgradation. This is a national priority. for this purpose, import of defence equipment that are not being manufactured in India are being exempted from the basic customs duty," Sitharaman said.
However, prices of petrol and diesel were increased by Rs 2 per litre in the Union Budget 2019 on the back of reduction in crude oil prices. Sitharaman proposed to increase Special Additional Excise duty and Road and Infrastructure Cess each by one rupee a litre on transport fuels.
FULL COVERAGE: Union Budget 2019A nominal basic customs duty has been imposed on tobacco products and crude oil in the Union Budget 2019. This has been done to address the contentions against National Calamity and Contingent duty levied on these items. In certain cases, this duty is contested on the ground that there is no basic excise duty on tobacco products and crude oil.
Gold, silver and platinum were also made costlier in the first Budget of the new Modi government as customs duty levied on them was increased from 10 per cent to 12.5 per cent.
The basic customs duty has been increased on cashew kernels, PVC, vinyl flooring, tiles, metal fittings, mountings for furniture and marble slabs in Union Budget 2019. Auto parts, certain kinds of synthetic rubber, optical fibre cable, CCTV camera, IP camera, digital and network cameras will also attract higher basic customs duty from now on.
ALSO READ: Budget 2019: Govt increases excise duty, cess on petrol, diesel by Re 1 each
FM Sitharaman also announced that exemptions from customs duty on certain electronic items which are now being manufactured in India will be withdrawn. However, capital goods required for manufacture of specified electronic goods have been exempted.
Union Budget 2019 also called for exemptions from customs duty on certain parts of electric vehicles to promote electric mobility.
"Further, end-use based exemptions on palm stearin, fatty oils, and exemptions to various kinds of papers are also being withdrawn. To encourage domestic publishing and printing industry, 5 per cent custom duty is being imposed on imported books," she further added.
In the Union Budget 2019, customs duty reductions has been proposed on certain raw materials and capital goods to promote domestic manufacturing. "These include certain inputs of CRGO sheets, amorphous alloy ribbon, ethylene di-chloride, propylene oxide, cobalt matte, naphtha, wool fibres, inputs for manufacture of artificial kidney and disposable sterilised dialyser, and fuels for nuclear power plants," Sitharaman said.
ALSO READ: Union Budget 2019: Gold to become more expensive with hike in import duty
The Finance Minister also announced rationalisation of export duty on raw and semi-finished leather to provide relief to this sector.
Sitharaman also proposed few amendments to the Customs Act to curb unfair practices to avail undue concessions and export incentives. "While we have intensified our efforts against such nefarious activities, provisions are being incorporated in the Act for enhanced penalty and prosecution for such offences. Further, misuse of duty free scrips and drawback facility involving more than Rs 50 lakh will be a cognizable and non-bailable offence," she said.