Union Budget 2018: Customs duty has been hiked to 20% from 15% on mobile phones, while it has been doubled to 20% on items such as kites, sunglasses, cigarette lighters and scent sprays.
The Union Budget for 2018-19 proposes a hike in customs duty on 46 items including mobile phones, automobiles and components, imitation jewellery, video game consoles, smart watches, electronic items such as TV/LED panels and fruit juice, a move aimed at protecting the domestic industry. The hiked duty on the wide range of items is estimated to result in revenue flow of about Rs 6,000 crore annually, officials said.
Customs duty has been hiked to 20% from 15% on mobile phones, while it has been doubled to 20% on items such as kites, sunglasses, cigarette lighters and scent sprays. The hike was again from 10% to 20% on items such as sports goods, video game consoles, tricycles, scooters, clocks, smart watches and lamps.
Imported trucks and buses along with cars and motorcycles assembled in India with components fully shipped from overseas will become costlier, with the customs duty on CKD (completely knocked down) imports of motor vehicles, motorcars, motorcycles increased to 15 per cent from 10 per cent. Also, duty on CBU (completely built units) imports of motor vehicles (trucks and buses) has been hiked to 25% from 20%, and on truck and bus radial tyres to 15% from 10%.
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While presenting the Budget, Finance Minister Arun Jaitley said he is making “a calibrated departure” from the underlying policy of the last two decades, when the trend was largely to reduce customs duties. “There is substantial potential for domestic value addition in certain sectors, like food processing, electronics, auto components, footwear and furniture. To further incentivise the domestic value addition and Make in India in some such sectors, I propose to increase customs duty on certain items,” he said. He added this move will help create more jobs.
Other items on which customs duty has been doubled to 20% include footwear, silk fabrics, perfumes and toiletry preparations. Customs duty on orange fruit juice has been hiked to 35% from 30%, on cranberry juice to 50% from 10% and on other fruit/vegetable juices to 50% from 30%. Customs duty on raw cashew was cut from 5% to 2.5% to help the cashew processing industry.
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The government has also imposed a Social Welfare Surcharge after the abolition of the Education Cess and Secondary and Higher Education Cess on imported goods at a rate of 10 per cent of the aggregate duties of customs, except on certain goods for which it has been proposed at 3%. Imported goods exempt from education cesses will, however, continue to be exempt from this surcharge. The government has reduced basic excise duty on petrol and diesel by Rs 2 per litre, while imposing a Road & Infrastructure Cess of Rs 8 per litre on petrol and high-speed diesel oil. The government also announced certain changes to the Customs Act, 1962, to improve ease of doing business in cross-border trade and to align certain provisions with commitments under the Trade Facilitation Agreement.