The exemption list includes locally manufactured agricultural products, chemicals, fabrics, drugs, medicines, and certain medical devices. Similarly, there were custom exemptions on some industrial inputs, and the list included advanced machinery, intermediate products, and raw materials to encourage domestic production.
To boost domestic production, the Union budget 2022-23 proposes to gradually phase out the custom concession on over 350 imported items. The custom exemption on these products was hindering the domestic goods capital market because these products were already being manufactured in the domestic market. The Budget 2022 imposed a 7.5% tariff on such imported products or services.
There was the withdrawal of custom concession on items like power, fertiliser, textiles, leather, footwear, and food processing as well. Simultaneously, the concession on project import duties for coal mining projects, power generation, transmission or distribution projects, railway and metro projects will also be gradually phased out. This move will certainly aid local industrial stakeholders.
The Indian government’s customs duty income had been 1.34 lakh crore in FY 21which increased to 2.13 lakh crore in FY 23. This shows the government’s determination to fan the ‘Make In India’ initiative but without eating custom loss. There is also new sets of customs concession introduced on advanced machinery and intermediates and raw materials including specialised castings, ball screw and linear motion guide that is not being manufactured in the domestic market. Custom concession on the import of these inputs will encourage domestic manufacturing.
Furthermore, the budget repealed anti-dumping duty (ADD) and countervailing duty (CVD) on stainless steel and coated steel flat products, certain alloy steel parts, and high-speed steel which will aid the domestic automobile and construction industry.
