Alteration in Price of Goods: Budget 2020 announces New Custom Duty Rates

To reduce non-essential imports and raise the revenue of domestic manufacturers, the Finance Minister Nirmala Sitharaman in the announced the new custom duty rates, which are to be made applicable to the country goods by the Budget 2020. Speaking about doubling farmers’ income by 2022, the Finance Minister stated for the need of hike in basic custom duty rates especially for certain consumer goods including ghee, butter, oil, cheese, walnuts, sunflower seeds, etc.

Additionally, a health cess is proposed by the Finance Minister on imports of medical equipment to ensure growth of health services. The motive was to bring more stakes in the domestic healthcare ecosystem.

Here’s a compact list of all goods recommended in the Budget 2020 for Custom duty hikes thereby increasing the prices of imported goods.

Following are the products on which Basic Custom Duty rates have been INCREASED:

ProductsRate of duty (in %)
           FromTo
Wall fan7.520
Household appliances & goods1020
Electrical appliance1020
Footwear2535
Furniture2025
Stationery item1020
Toys2060
Electric Vehicle2540
Mobile1020
Earphone & headphoneNil15
Power adaptorsNil20
Food processing30100
Chemical & plastics7.510
Auto & auto parts3040
Cigarettes4560
Tobacco products1025
High Voltage Power handling machine57.5
Railway carriage fans7.510
The compressor of refrigerator and AC1012.5
Commercial freezer7.515
Welding & Plasma cutting machinery7.510
Rotary fillers2.57.5
Miscellaneous item1020

Following are the products on which Basic Custom Duty rates have been DECREASED: 

ProductsRate of duty (in %)
           FromTo
Open-cell for a TV set7.520
Solar cell- unassembled1020
Solar cell-assembled1020
Fuel, chemical and plastic10Nil
Precious metal12.57.5
Machinery & electronic goods10Nil
Sport goodsApplicable rateNil
Newsprint105

Exemptions are withdrawn from the following goods: 

  • Agro & animal-based products including skimmed milk, certain alcoholic beverages, raw sugar, soya protein, soya fiber, etc.
  • Item of metal including lead bars, pipes, and tubes, Tin plates and strips.
  • Machinery used in metro forming, electricity production and construction of roads.
  • Electronic items used in a printer, CD writer, MP3, MP4, MPEG4 player, Pre-recorded cassettes, audio cassettes, color TV panel, etc.
  • Miscellaneous such as peanut butter, preserved potatoes, instant print films, exposed cinematographer films.

Other propositions in Budget 2020

  • The imposition of 5 % health cess on import of health equipment.
  • Removal of Anti Dumping Duty on import of Purified Telepathic Acid.
  • Increased National Calamity Contingent Duty on Cigarettes and Tobacco Products.

The Budget 2020 was overall expected to raise consumer spending and curb the economic slowdown, but with an increase in custom duty rates, most household and daily use items getting expensive, it can be said that consumer spending as it was in FY 2019 might also be low in FY 2020 too. Expedite your Import and Export Registration with Taxreturnwala.com
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