The government had decided to raise the customs duty on certain ‘non-essential’ items during the economic review meeting chaired by Prime Minister Narendra Modi.
This increase in import duty is aimed at bridging current account deficit (CAD) in order to save Indian rupee from the incessant fall it has seen in the recent past.
The Ministry of Finance issued a notification on Wednesday listing the items that will bear the increase in import duty. The increase in basic customs duty on import of these items will come into effect from September 27. The total value of imports of these items in the year 2017-18 was about Rs 86,000 crore, Finance Ministry statement said.
The government has doubled the customs duty on imported air conditioners, household refrigerators, and washing machine weighing less than 10 kilograms from 10 per cent to 20 per cent. Compressors for air conditioners and refrigerators, on the other hand will attract 10 per cent customs duty instead of earlier 7.5 per cent.
Aviation turbine fuel, which was kept free of customs duty earlier, will now attract 5 per cent import duty, which will ultimately make air travel costlier. The total value of ATF imported during the financial year 2017-18 was $180.85 million.
Imported footwear, which earlier used to attract customs duty to the tune of 20 per cent, will now have import tariffs imposed at the rate of 25 per cent.
Speakers, radial car tyres, plastic-made bathroom fittings, plastic boxes and bottles, as well as tableware, kitchenware and other household items of plastics will attract customs duty to the tune of 15 per cent from the earlier 10 per cent. Miscellaneous plastics items, and trunks, suitcase, executive cases, brief cases, travel bags and other bags will also see customs duty on them increased from 10 per cent to 15 per cent.
Customs duty on import of cut and polished diamond, semi-processed, half cut or broken diamonds, lab-grown diamonds, cut and polished coloured gemstones has been increased from 5 per cent to 7.5 per cent. The articles of jewellery or parts of jewellery made of precious metals will be taxed at 20 per cent. Articles of goldsmith and silversmith wares and their parts which are either made of precious metals or covered in them will also attract 20 per cent customs duty instead of 15 per cent.
Government is reportedly planning to increase customs duty on other items in the coming days. The import tariff hike notified today alone might help government accrue funds to the tune of Rs 4,000 crore by the end of this financial year.
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