What gets costlier and what would be cheaper?

Each year budget provides an occasion to tweak custom duties with an aim to rationalize tax structure and support underlying themes. In recent years, emphasis has been to encourage “Make in India”, de-carbonized economy and China plus themes. Some of these are reflected in the current budget announcements as well.

Here is the list of items which gets costlier and cheaper:

What gets costlier

1, Vehicle (including electric vehicles) in Semi-Knocked Down (SKD) form : Basic custom duty (BCD) for Vehicles including EV (electric vehicles) in Semi-Knocked Down (SKD) form increased from 30 percent to 35 percent

2, Duties on Electrically operated Vehicle in Completely Built Unit (CBU) form, other than with CIF value more than USD 40,000 increased from 60 percent to 70 percent

3, BCD on Styrene increased from 2 percent to 2.5 percent

4, BCD on Vinyl Chloride Monomer increased from 2 percent to 2.5 percent

5, BCD on Articles of precious metals increased from 20 percent to 25 percent

6, BCD on Imitation Jewellery increased from 20 percent to 25 percent

7, BCD on Bicycles increased from 30 percent to 35 percent

8, BCD on Toys (other than electronic toys) increased from 60 percent to 70 percent

9, BCD on Naphtha increased from 1 percent to 2.5 percent

10, BCD on compounded rubber increased from 10 percent to 25 percent

11, BCD on electric chimney increased from 7.5 percent to 15 percent

12, NCCD (national calamity contingent duty) has been increased on cigarette and other tobacco products by 15 percent.

Higher duties for semi-knocked down and completely built unit vehicles, bicycles, toys, electric chimney is a support for local manufacturers and makes them competitive. Duties on articles of precious metals and imitation jewellery is to discourage non-essential imports and reduce current account deficit.

What gets cheaper

1, Denatured Ethyl alcohol: Basic custom duty (BCD) for Denatured Ethyl alcohol for use in manufacture of industrial chemicals reduced from 5 percent to nil.

2, Acid grade fluorspar: BCD reduced from 5 percent to 2.5 percent.

3, Epichlorohydrin: BCD on crude glycerin for use in manufacture of Epichlorohydrin reduced from 7.5 percent to 2.5 percent.

4, BCD on various aquatic feeds (fish meal, krill meal, premixes) reduced from 15 percent to 5 percent.

5, BCD on algal Prime (flour) and fish lipid oil for use in manufacture of aquatic feed reduced from 30 percent to 15 percent.

6, BCD on seeds for use in manufacturing of rough lab-grown diamonds reduced from 5 percent to nil.

7, BCD on specified parts for manufacture of open cell of TV panel reduced from 5 percent to 2.5 percent.

8, BCD on camera lens and its inputs/parts for use in manufacture of camera module of cellular mobile phone reduced from 2.5 percent to  nil

9,  BCD on Palladium Tetra Amine Sulphate for manufacture of parts of connectors from 7.5 percent to nil.

10, BCD on Heat Coil for use in the manufacture of Electric Kitchen Chimneys from 20 percent to 15 percent.

11, Specific capital goods/machinery for manufacture of Lithium ion cell for use in battery of electrically operated vehicle (EVs): Duties reduced to zero.

12, Custom duties on aero planes and other aircrafts reduced from 3 percent to 2.5 percent.

Few of the chemical raw materials mentioned clearly is a boost for the chemical processors in the categories of fluorochemicals, resins etc. Lower duties for the ingredients used for aquatic feeds certainly helps shrimp processors and helps farmers involved in aquaculture in terms of affordability. Similarly lower duties for inputs for e-chimneys, lithium ion cell, mobiles, tv panels help industries in EV, battery and electronic goods manufacturing.