From a much-awaited cut in long-term capital gains (LTCG) tax on unlisted shares to levying a tax on crypto gains, a sign of legitimising the asset class, there was a lot to unpack. Overall the budget was a little disappointing as far as the taxpaying middle class was concerned with the government taking a cautious approach.
A large number of commonly used items, including headphones, earphones, loudspeakers, smart meters, imitation jewellery, solar cells and solar modules will become more expensive due to a hike in customs duties on imported parts, as proposed by Finance Minister Nirmala Sitharaman in the Union Budget for 2022-23.
Also Read: Union Budget 2022: Here are the key takeaways
However, imported cut and polished diamonds, frozen mussels, frozen squids, asafoetida, cocoa beans, methyl alcohol and acetic acid will become cheaper as a result of rationalisation in customs duties.
Also Read: Union Budget 2022: How does education sector read initiatives announced by FM Sitharaman?However, certain goods will become cheaper as the government has slashed the customs duty and they areas follows:
Except a small relief for diamond traders, the jewellery industry has not benefited much from Budget 2022. While there is no change in the import duty of gold, that on cut and polished diamonds has been brought down to 5 percent from 7.5 percent.
The Budget said customs duty on cut and polished diamonds and gemstones is being reduced to 5 percent in a bid to “boost the gems and jewellery sector. Simply sawn diamond would attract nil customs duty.”
Here is the detailed list of sector-specific proposals made in the budget
Electronics: Customs duty rates to be calibrated to provide a graded rate structure - to facilitate domestic manufacturing of wearable devices, hearable devices and electronic smart meters. Sitharaman announced duty concessions on parts of transformer of mobile phone chargers and camera lens of mobile camera module and certain other items – To enable domestic manufacturing of high growth electronic items.
Gems and Jewellery: Customs duty on cut and polished diamonds and gemstones being reduced to five percent; Nil customs duty to be imposed on simply sawn diamond. This will give a boost to the gems and jewellery sector of the country, the Finance Minister said. Additionally, a simplified regulatory framework will be implemented by June this year to facilitate the export of jewellery through e-commerce.
Further, customs duty of at least Rs 400 per Kg will have to be paid on imitation jewellery import to disincentivise import of undervalued imitation jewellery.
Chemicals: Customs duty on certain critical chemicals namely methanol, acetic acid and heavy feed stocks for petroleum refining being reduced; Duty is being raised on sodium cyanide for which adequate domestic capacity exists – This will help in enhancing domestic value addition.
MSME: Customs duty on umbrellas being raised to 20 percent. Exemption to parts of umbrellas being withdrawn.
Exemption being rationalised on implements and tools for agri-sector which are manufactured in India
Customs duty exemption given to steel scrap last year extended for another year to provide relief to MSME secondary steel producers
Certain anti-dumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked – to tackle prevailing high prices of metal in larger public interest.
Exports: To incentivise exports, exemptions are being provided on items such as embellishment, trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings and packaging boxes.
The Centre will be reducing duty on certain inputs required for shrimp aquaculture to promote its exports. Tariff measures will be introduced to encourage the blending of fuel. Meanwhile, petrol and diesel could get more expensive as unblended fuel will attract an additional differential excise duty of Rs 2/ litre from October 1, 2022, to further encourage the blending of fuel.