In the budget for 2022-23, 350 customs duty exemptions will be scrapped to boost domestic manufacturing. A comprehensive review of customs duty exemptions on capital goods and project imports will be undertaken, and more than 40 customs exemptions will gradually be phased out, the Central Board of Indirect Taxes and Customs (CBIC) tweeted. A total of 350 exemptions will be scrapped, CBIC said.
As part of the Budget tabled in Parliament on February 1, customs duty rates were rationalized on a variety of goods. Duty on capital goods and project imports was rationalized by phasing out concessional rates and applying a moderate tariff of 7.5 percent. Exemptions for advanced machines that are not manufactured within the country, however, will remain in place. For the electronics sector, customs duty rates will be standardized on wearable devices, hearable devices, and electronic smart meters. Furthermore, the duty concessions on the transformers of mobile phone chargers and the camera lens of mobile camera modules have been reduced.
Additionally, the basic customs duty on hearable and wrist wearable devices, as well as their parts and sub-parts, will increase. The customs duty on cut and polished diamonds and gemstones has been lowered from 7.5 percent to 5 percent in the gems and jewelry sector. Diamonds that have been sawn will not be subject to customs duties under the Kimberley Process Certification Scheme (KPCS). The basic customs duty rate on imitation jewelry is 20 percent or Rs 400/kg, whichever is higher.
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