On February 1st, India's finance minister, Sitaraman, presented the budget for fiscal year 2021/2022 to parliament. Once the new budget was announced, it was concerned by all parties which include ic Socket, driveway reflectors and Electric Terminal Block.
Reference: https://www.indiabudget.gov.in/doc/impbud2020-21.pdf
During the budget, import tariff adjustments focused on electronics and mobile products, steel, chemical, auto parts, renewable energy, textiles, MSME manufactured products and agricultural products that encouraged local production. Tariffs on certain car parts, mobile phone parts and solar panels have been raised to drive domestic manufacturing.
Reference: https://economictimes.indiatimes.com/topic/Basic-Customs-Duty
For example, tariffs on refrigerators and air-conditioning compressors increased from 12.5 percent to 15 percent, while tariffs on LED lights, parts and spare parts (such as printed circuit boards) increased from 5 percent to 10 percent.
Now, import or raw materials for li-ion batteries as well as cartridges and ink nozzles will be subject to a 2.5% tariff. The leather finished product will be charged 10% base duty. To help local producers, tariffs on imported nylon fibers and yarns have been cut from 7.5 percent to 5 percent.
Website:
https://economictimes.indiatimes.com/small-biz/trade/exports/insights/budget-2021-400-old-duty-exemptions-to-get-a-rejig-duties-cut-on-many-items-to-help-msmes/articleshow/80631119.cms
So what are the specific product tariff adjustments? Let's see:
Tariff reduction products
Tariffs on scrap copper were reduced to 2.5 per cent;
Waste steel duty free (until 31 March)
Tariffs on naphtha were reduced to 2.5 per cent;
Basic tariffs on newsprint and light coated paper imports were reduced from 10 per cent to 5 per cent.
Tariffs on solar inverters increased from 5 per cent to 20 per cent and tariffs on solar lamps from 5 per cent to 15 per cent;
The tariffs on gold and silver should be rationalized: the basic tariff on gold and silver is 12.5. Since tariffs increase from 10% in July 2019, the price of precious metals rose sharply. To raise it to its previous level, Tariffs on gold and silver were reduced to 7.5 per cent. Tariffs on other gold mines were reduced from 11.85 per cent to 6.9 per cent; Silver ingot yield rose from 11% to 6.1%; 12.5 per cent of platinum; The proportion of gold and silver found decreased from 20% to 10%; Ten percent of precious metal coins dropped from 12.5 percent.
Import duties on non-alloy, alloy and stainless steel semi-finished products, plates and long materials were reduced to 7.5 per cent. In addition, India's Ministry of Finance is considering early removal of scrap tariffs, which are scheduled to expire on March 31, 2022.
Basic tariffs (BCD) on nylon chips, nylon fibers and yarns are reduced to 5.
Jewelry and gemstones decreases from 12.5% to 7.5% respectively.
Products with tariff increases include
Cotton tariffs rose from 0 to 10 per cent;
Import duty on raw and silk yarn increased from 10% to 15%;
Tunneling machines are subject to a 7 per cent tariff and 2.5 per cent tariff on their parts;
Footwear tariffs increased from 25 to 35 per cent;
Toy tariffs rose from 20% to 60%;
Tax rates for furniture such as seats, lamps and mattresses will be increased from 20 per cent to 25 per cent;
Tariffs on electrical appliances such as fans, food grinders/agiters, razors, water heaters, ovens, toasters, coffee makers, heaters and irons, and fixed items such as filing cabinets and paper disks increased from 10 to 20 per cent;
Tariffs on commercial refrigerators increased from 7.5 per cent to 15 per cent;
Tariffs on refrigerators and air-conditioning compressors increased from 10 per cent to 12.5 per cent;
Tariffs on rail fans increased from 7.5 per cent to 10 per cent;
Tariffs on welding and plasma cutting machines increased from 7.5 per cent to 10 per cent;
In the case of electric vehicles, tariffs on imports of fully built electric buses and electric trucks increased from 25 per cent to 40 per cent, tariffs on semi-finished goods for buses, trucks and two-wheeled vehicles from 15 per cent to 25 per cent, tariffs on passenger cars and tricycles from 15 per cent to 30 per cent, import kits for all electric vehicles (parts imported into India for re-assembly) and tariffs from 10 per cent to 15 per cent;
Tariffs on certain parts of mobile phones have been raised from "zero" to 2.5 per cent; the import tariff increase is aimed at further enhancing the added value of domestic products, with some of the original zero-tariff products being slightly increased to 2.5 per cent, including assembled printed circuit boards (PCBA), camera modules (Camera Module), connectors (Connector);
The import duty on LED lamps or installations (LED Lights or Fixture) was increased from 5 per cent to 10 per cent;
The tariff on shelled walnuts will increase from 30% to 100%.
An emphasis needs to be placed on the introduction of the Agricultural Infrastructure and Development Centre (AIDC.) in India's budget for the new fiscal year The new tariff is an additional tariff on certain goods. These changes will take effect on February 2,2021.
India, for example, cut its palm oil-based import tariffs from 27.5 per cent to 15 per cent, but would impose an additional 17.5 per cent on imports; an additional 35 per cent on apples; and an additional 40 per cent on peas.
For more additional taxes, please click the following:
https://taxguru.in/custom-duty/key-changes-customs-excise-union-budget-2021.html
Finance Minister Neil Marla Sitaraman (Nirmala Sitharaman) said in a budget speech :" Our tariff policy should achieve the dual goal of promoting domestic manufacturing and helping India enter global value chains and better export. The focus must now be on access to raw materials and value-added exports."
Mr Sitaraman says the government is overhauling the entire structure. 80 outdated tax exemption policies have been abolished and another 400 are under review, and a new "perfect" tariff system will be established by October 1, 2021.
In addition, India's executive director at the International Monetary Fund, Wilmani, said India needed a dual trade policy to reduce its import dependence on manufacturers like China, while attracting supply chains from the rest of the world through lower and more uniform import tariffs. While production-related incentives are a good start (for effective import substitution in manufacturing), the government still needs to further reform the tariff structure to achieve the goal of a dual trade policy."
Post time: Feb-23-2021