Budget 2023: Customs duty reduced on inputs for mobile phones

The government to promote domestic manufacturing of mobile phones reduced customs duty on import of certain parts and inputs like camera lens and extended the concessional duty on lithium-ion cells for batteries for another year.

Finance Minister Nirmala Sitharaman also extended the customs duty exemption to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles.

These announcements were made by the minister in her budget speech.

The finance minister also revised upwards the National Calamity Contingent Duty on specified cigarettes by about 16%. It was last revised three years ago.

To avoid cascading of taxes on blended compressed natural gas, she proposed to exempt excise duty on GST-paid compressed biogas contained in it.

“To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles,” Sitharaman said in her speech.

She said as a result of various initiatives, including the phased manufacturing programme, mobile phone production in India has increased from 5.8-crore units with a value of around Rs 18,900 crore in 2014-15 to 31-crore units with a value of over Rs 2,75,000 crore in the last financial year.

“To further deepen domestic value addition in manufacture of mobile phones, I propose to provide relief in customs duty on import of certain parts and inputs like camera lens and continue the concessional duty on lithium-ion cells for batteries for another year,” she announced.

The minister increased the duties on articles made from dore and bars of gold and platinum to enhance the duty differential.

The customs duties on dore and bars of gold and platinum were increased earlier this fiscal. She also proposed to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum.

The Union Budget 2023-24 also proposed to nullify the basic customs duty on seeds, used in the manufacturing of lab grown diamonds, from the current 5%.

Sitharaman stated that India contributed about three-fourths of the global turnover by value in cutting and polishing of natural diamonds industry. With the depletion in deposits of natural diamonds, the industry is moving towards lab grown diamonds.

To facilitate the availability of raw materials for the steel sector, the finance minister proposed to continue the exemption from BCD on raw materials for manufacturing of CRGO steel, ferrous scrap and nickel cathode.

She also announced continuation of the concessional BCD of 2.5% on copper scrap to ensure the availability of raw materials for secondary copper producers, who are mainly in the MSME sector.

The government has also increased BCD rate on compounded rubber from 10% to 25% or Rs 30 per kilogramme, whichever is lower, at par with that on natural rubber other than latex, to curb circumvention of duty.

Also, the BCD has been increased on electric kitchen chimney from 7.5% to 15%. There is a reduction in BCD on heat coils from 20% to 15%.

This change would rectify inversion of duty structure and encourage manufacturing of electric kitchen chimneys, the minister said.

To support the ethanol-blending programme and facilitate India’s endeavour for energy transition, the minister announced exemption of BCD on denatured ethyl alcohol.

She also reduced BCD on acid grade fluorspar from 5% to 2.5% to make the domestic fluorochemicals industry competitive.

The BCD on crude glycerin for use in manufacturing of epichlorohydrin has also been reduced from 7.5% to 2.5%. PTI