It was on Tuesday that Finance Minister Nirmala Sitharaman came out with the Union Budget for 2022-23. She stated she wants to raise the basic customs duty (BCD) on many common items that people buy, like headphones or earphones. This is to help the country make more of these things in the country and support the Indian Economy. However, Budget 2022 also announced the Import Duty reduced on Diamonds and Gemstones. In this article, you will get to know about the latest updates on new Import Duty charges in India.
What is Import Duty?
Import duty is a tax that a country’s customs authorities collect on goods that are brought in and some that are exported.
If a good is worth a lot, then the import duty will usually be based on that value, as well.
There are also several other names for Import Duty such as a customs duty, tariff, import tax, or import tariff.
Hence, Import Duty terms and rates all depend on the type of country that you are in.
Why Import Duty or Customs Duty is Important?
There are basically two reasons the government imposes Import Duty i.e.
- Generate More Revenue to the Local Government.
- Help Local Businesses by encouraging citizens to buy local products.
Let’s understand it through an example. There was a recent increase in the import duties tax in India on a number of commodities such as tableware and footwear, as well as on appliances such as freezers and air-conditioners.
In order to prevent the rupee from depreciating against other currencies and to keep the current fiscal deficits in check, the government has taken this step. Additionally, this new customs fee is intended at limiting the importation of certain goods. ‘
When the import tariff is increased, the price of the items will rise, resulting in a decrease in demand, which in turn lowers the number of imported goods.
In a manner, this helps support domestic producers. Import duties are primarily intended to benefit the country’s economy, its people, its workforce, and the business cycle.
Thus, the government keeps a check on Import Export Business to stabilize the nation’s economy. If you are into an import-export business or starting one, you must know about – How to Start Import Export Business In India and Import Export Code.
Latest Update: Import Duty reduced on Diamonds and Gemstones
Nirmala Sitharaman, India’s Finance Minister, stated on Tuesday that the import duty on cut and polished diamonds and gemstones will be reduced to 5%, while the charge on sawn diamonds would be zero.
Import duties on cut and polished diamonds and gemstones prior to Union Budget 2022 stand at 7.5 Percent.
Sitharaman also declared in her Union Budget Speech, that the authorities will also make it easier for Indian jewelers to sell their wares abroad by implementing a “simplified regulatory framework” by June of this year.
Imitation or Artificial jewelry is being taxed at a minimum of 400 rupees per kilogram in order to discourage the importation of discounted imitation jewelry, she further said.
Other Significant Revisions in Import Duty
- The tax on headphones and earphones, whether or not integrated with a microphone, and sets containing a microphone and one or more loudspeakers has increased from 15% to 20%.
- Products like methyl alcohol (methanol) and acetic acid have had their duties reduced from 10 percent each to 2.5 percent and 5 percent.
- In order to lower the BCD (Basics Custom Duty) on camera lenses used in the production of camera modules for mobile phones, it has been recommended that the BCD be reduced from 15% to 2.5%.
- The Union Government has requested that the BCD on umbrella imports be increased from the current 10% to 20% in order to assist the MSME sector, and the exemptions for components of umbrellas have also been withdrawn.
- MSME secondary steel manufacturers would benefit from an additional year of the exemption from customs duties granted to steel scrap in 2021.
- Customs duties on cocoa beans have been lowered from 30% to 15%.
- As part of its BCD plan, the government also proposes to include recovered (waste and scrap) paper in the imports. It will now be taxed at a rate of 2.5%.
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.