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Budget 2019: Change in basic customs duties to boost Make in India
Jul 08, 2019

The budget has proposed a significant rejig in basic customs duties to encourage manufacturing in the country. This involves raising customs duties on a number of products, withdrawing exemption from some and lowering rates for others to encourage value addition. 
 
The aim is to emerge as an attractive investment destination for companies looking to diversify manufacturing operations from China. The move also intends to give some protection to domestic producers. 
 
Make in India is a cherished goal, finance minister Nirmala Sitharaman said. Experts say these measures will boost Make in India and enhance ease of doing business. 
 
 
Indirect tax proposals are based on promoting the key themes around Make in India, environmental concern, technology-led tax administration and ease of doing business,” said Pratik Jain, national leader, indirect taxes, PwC. 
 
Duty increases have been proposed on a host of items ranging from stainless steel to CCTV cameras to outdoor units of split air-conditioners. Sitharaman a lso announced a waiver of customs duty for nuclear power and parts required for building eight indigenous atomic energy plants as the country eyes a bigger space in the sector. Exemption has been provided for the defence sector, but it’s limited to goods not manufactured in India. 
 
The removal of basic customs duty on capital goods for manufacturing of parts and components will reduce capital cost by 7% and improve competitiveness, said Pankaj Mohindroo, chairman, India Cellular & Electronics Association. 
 
Mohindroo said many such steps will lead towards making India the most competitive nation in the mobile phone manufacturing ecosystem and will eventually reduce costs for consumers. 
 
Budget proposals seek to boost Make in India, with benefits provided to manufacturing sector by way of reducing duties on certain inputs and raw materials and creating a level playing field by increasing duties on certain goods,” said Prashant Deshpande, partner, Deloitte India. 
 
    

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