Custom Duty Concessions Ensured Industry Remains Competitive, Says CBIC Chairman

We received a lot of representations from various chambers, industries, and concerned ministries. After these proposals were examined, we also took feedback from the user industry of these products. There are items where there could be an inversion of duty. The final product might be subject to a lower rate of duty, where the input may have a higher rate of duty. All these aspects are kept in mind, and then the decision is taken on what is to be exempted and where the rate is to be lowered or increased.An example is of the proposal we received for reduction of duty on critical minerals, which are not mined in the country but are very critical for the manufacturing sector. A decision was taken to bring a budget proposal for exempting such 25 critical minerals, and to boost their processing and further use them in industries of electronics, telecommunication, renewable energy, space, and defense. There was a proposal for some other minerals also, but their rates have not been touched because there is substantial manufacturing capacity in the country. That is the thought process for bringing the proposals in the budget.Similarly, in the export sector, there are items with huge export potential where India is performing very well. The rate of duty on shrimp feed was reduced from 15 per cent to 5 per cent, to promote frozen shrimp exports. But since there is some production capacity for shrimp feed in the country, the raw materials have now been fully exempted.Another objective is also to diversify the supply chain and protect the domestic industry. The rate of duty has been raised from 7.5 per cent to 10 per cent on ammonium nitrate, whose import was impacting the domestic industry. In case of flex banners, the rate has been increased to 25 per cent. Where the item is not good for the environment, it was also a very cheap import from China.Besides, for mobile phones, the rate of duty was raised to 20 per cent. It was also kept high on certain parts to deepen the value chain and increase their manufacturing in the country. Now since the ecosystem has evolved and they are being domestically produced, it is time to bring the rates back to the normal level so that industry remains competitive. It is not that once we have increased the rate of duty, it will remain at that level forever.

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