Union Finance Minister Nirmala Sitharaman presented the 2024-25 budget before Parliament today. The Finance Minister announced that the central government will develop an economic policy framework aimed at implementing next-generation reforms to boost employment and accelerate economic growth.
New Provisions and Exemptions
The Central Government has introduced a new provision in Section 65(1) of the Customs Act, granting it the authority to exclude certain manufacturing processes or operations for specific classes of goods from being conducted in warehouses. Once the Finance Bill receives presidential assent and becomes the Finance Act, this could potentially exclude solar power developers or other categories from the scope of Section 65 and the related MOOWR Regulations.
GST Compensation Cess on SEZ Imports
Ongoing investigations regarding GST Compensation Cess on imports by Special Economic Zones (SEZs) have led to a significant change. An exemption notification has now been given retrospective effect from July 1, 2017, the inception of GST.
Customs Duty Adjustments
Customs duty rates have been strategically adjusted to support domestic manufacturing. Duties on products with sufficient domestic manufacturing capacity have been increased, while duties on raw materials and inputs have been lowered to facilitate imports. A review is proposed within the next six months. Notable changes include:
Critical Minerals: Basic Customs Duty (BCD) has been reduced to NIL on critical minerals such as Antimony, Beryllium, Bismuth, and others. BCD on Graphite, Silicon Quartz, and Silicon Dioxide has been reduced to 2.5%.
Mobile Phones: BCD on cellular mobile phones, PCBAs, and chargers/adapters for mobile phones has been reduced from 20% to 15%.
Precious Metals: BCD on gold bars/dore, silver bars/dore, and platinum has been reduced from 10% to 5%, along with a reduction in the AIDC rate.
Solar Manufacturing: Specified capital goods for manufacturing solar cells and modules are exempted from BCD.
Ammonium Nitrate: BCD has been increased from 7.5% to 10%.
Plastics: The tariff rate for CTH 3920 and 3921 has been increased to 15%.
Review of Exemptions and Concessional Rates
A thorough review of 188 conditional exemptions/concessional rates (150 entries from notification No. 50/2017-Customs dated June 30, 2017, and 38 standalone notifications) has been conducted. The outcomes are:
Extended: 30 exemptions/concessional rates extended until March 31, 2029.
Continued: 126 exemptions/concessional rates continued until March 31, 2026.
Lapsed: 28 exemptions/concessional rates to lapse on their end date of September 30, 2024.
Removed End Dates: End dates removed for 4 exemptions, as they are covered by the exclusion clause.
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