Budget 2020

Budget 2020 | Steep hike in Customs Duty to keep China toys out of reach

Move to keep uncontrolled dumping under check, protect interests of MSMEs and to facilitate ease of doing business

Customs Duty on a range of articles like household goods, electrical appliances, auto parts, footwear, furniture and some mobiles phone parts has been raised in the Union Budget.

This has been done keeping in view the interests of the MSME segment, to facilitate ease of doing business, secure trade borders and to keep uncontrolled dumping under check.

S. Jaikumar, country head, Swamy Associates said, “Raising Customs Duty is aimed at helping MSMEs in the country as dumping from China has been hurting them. This will boost domestic industry, local employment and eventually impact GDP.” The Customs Duty mop-up for FY 2020-21 is seen at ₹1.38 lakh crore.

Duty on toys, tricycles, scooters, scale models and dolls has seen a steep increase from 20% to 60%.

The Customs Duty on the import of food processing products has been raised to 100%, while the levy on auto and auto parts has been raised by up to 10%.

Watch | Highlights of Union Budget 2020-21

Duty on tableware and kitchenware of porcelain or china, ceramics, clay, iron, steel, copper and aluminium, glassware, padlocks, brooms, hand-sieves, combs and vacuum flasks has been increased from 10% to 20%.

Duty on electrical appliances such as fans, food grinders/ mixers, water heaters, hair/ hand drying apparatus, ovens, cookers, toasters, coffee/ tea makers, insect repellents, heaters and irons have also gone up from 10% to 20%.

Other goods that will see an increase in Customs Duty are: footwear (from 25% to 35%); parts of footwear (from 15% to 20%); furniture such as seats, bedding and mattresses, and lamps and lights (from 20% to 25%); and stationery items (from 10% to 20%). The printed circuit board assembly (PCBA) of mobile phones will attract a Customs Duty of 20% from the earlier 10%. Vibrators/ringers of mobile phones, display panel and touch assembly will attract 10% duty.

 

Duty cut on newsprint

The Finance Minister has proposed to cut the basic Customs Duty on imports of newsprint and lightweight coated paper from 10% to 5%. She said the reduction has been done with the objective of easing “the burden on the print media at a time when it is going through a difficult phase”.

The Budget also proposes reduction in Customs Duty on raw materials and inputs imported by domestic manufacturers. The Duty of 10% on fuel, chemicals and plastics would be fully removed.

The FM said Customs Duty exemption had been reviewed to weed out entries that are redundant, outdated or have outlived their utility.

As many as 80 exemptions are being withdrawn by making suitable amendment/ rescission of relevant notifications. Imports under Free Trade Agreements (FTAs) are on the rise. Undue claims of FTA benefits have posed threat to the domestic industry. Such imports require stringent checks.

In this context, suitable provisions are being incorporated in the Customs Act, as per the Budget proposal.

The FM said in the coming months, the government would review Rules of Origin requirements, particularly for certain sensitive items, to “ensure that FTAs are aligned to the conscious direction of our policy.”

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Printable version | Feb 22, 2020 2:00:03 PM | https://www.thehindu.com/business/budget/steep-hike-in-customs-duty-to-keep-china-toys-out-of-reach/article30715464.ece

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