Budget 2025-26 GST set for review, customs duty structure simplified
03 Feb 2025

Finance minister Nirmala Sitaraman has offered to further simplify and rationalise the Goods and Services Tax (GST) structure and expand it to the remaining sectors so as to multiply its benefits.
She also proposed to simplify customs duties in order to support domestic manufacturing, deepen local value addition, promote export competitiveness, and simplify taxation, while keeping in mind the interest of the general public and consumers.
She promised to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes.
The budget proposes to fully exempt three more medicines for cancer treatment from customs duty. It also proposed changes in the basic customs duty (BCD) on x-ray tubes and flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, so as to synchronise them with domestic capacity addition.
With a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the finance minister proposed to reduce the BCD on mobile phone, mobile PCBA and mobile charger to 15 per cent.
The finance minister also proposed to fully exempt 25 critical minerals such as lithium, copper, cobalt and rare earth elements that find use in key sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics, from customs duty and reduce BCD on two of them.
The finance minister also proposed to withdraw customs duty exemption extended to imports of solar glass and tinted copper interconnect, in view of sufficient domestic manufacturing capacity.
To give a further boost to seafood exports, which touched an all-time high of over Rs60,000 crore last year, the finance minister proposed to reduce BCD on certain broodstock, polychaete worms, shrimp and fish feed to 5 per cent. Further, she proposed to exempt various inputs for manufacture of shrimp and fish feed from customs duty.
Similarly, the budget also proposed to reduce BCD on real down filling material from duck or goose impoted for the manufacture of leather and textile garments, footwear and other leather article for export.
Besides, the budget proposed to reduce BCD, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent. In addition the list of exempted goods for manufacture of leather and textile garments, footwear and other leather articles for export has been expanded.
The budget also proposed to simplify and rationalise export duty structure on raw hides, skins and leather.
The finance minister proposed to simplify and rationalise custom duty on import of gold and silver to 6 per cent and that on platinum to 6.4 per cent.
She also proposed to remove import duty on ferro nickel and blister copper while keeping the nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap.
To increase domestic value in the electronics industry, the budget proposed to remove the BCD, subject to conditions, on oxygen free copper for manufacture of resistors. Sitaraman also proposed to exempt certain parts for manufacture of connectors from customs duty.
The budget proposed a hike in the BCD on ammonium nitrate from 7.5 to 10 per cent, while also raising import duty on PVC flex banners from 10 to 25 per cent.