Union Budget 20014-15: Basic custom duty on select items reduced to support domestic production
10 July 2014
In the general budget 2014-15, presented in Parliament today, finance minister Arun Jaitley announced a reduction in basic customs duty (BCD) on certain items in the chemicals and petrochemicals sector.
He said the reduction in duties is intended to encourage new investment and capacity addition and to address the issue of inverted duties.
Jaitley said steps have also been taken to boost domestic production of electronic items and reduce the country's dependence on imports.
These include imposition of basic customs duty on certain items outside the purview of IT Agreement, exemption for inputs / components in PC manufacturing from SAD, imposition of education cess on imported electronic products for parity etc.
Colour picture tubes have been exempted from basic customs duty to make cathode ray TVs cheaper and more affordable to weaker sections. To encourage production of LCD and LED TVs below 19 inches in India, basic customs duty on LCD and LED TV panels of below 19 inches has been reduced from 10 per cent to nil.
To give an impetus to industry, the finance minister said the basic customs duty on imported flat-rolled products of stainless steel will be increased from 5 per cent to 7.5 per cent.
The concessional basic customs duty of 5 per cent has now been extended to machinery and equipment required for setting up of a project for solar energy production, he added.
The budget proposes reduction in the basic customs duty from 10 per cent to 5 per cent on forged steel rings, used in the manufacture of bearings of wind operated electricity generators. Concessional basic customs duty of 5 per cent has been proposed on machinery and equipment required for setting up of compressed biogas plants (Bio-CNG).
On the other hand, basic customs duty on metallurgical coke has been increased from nil to 2.5 per cent in line with the duty on coking coal.
The budget proposes increase in duty-free entitlement for import of trimmings, embellishments and other specified items from 3 per cent to 5 per cent of the value of their export for readymade garments.
Export duty on bauxite has been increased from 10 per cent to 20 per cent. For passenger facilitation, free baggage allowance has been increased from Rs35,000 to Rs45,000.
To incentivise expansion of processing capacity, excise duty on specified food processing and packaging machinery has been reduced from 10 per cent to 6 per cent.
The budget has extended concessional excise duty of 2 per cent without Cenvat benefit and 6 per cent with Cenvat benefit to sports gloves.