In the last month, the Finance Minister has introduced changes in custom duty in budget 2022 on items of daily use items. These include umbrellas, headphones, earphones, loudspeakers, smart meters, and imitation jewelry. Who does the duty change benefit and what does it mean? With a view to protecting domestic industries that do not necessarily need to invest in capital, technology, or labor. The Finance Minister introduced a lot of higher customs duties on items of everyday use. It includes such as umbrellas, headphones, earphones, loudspeakers, smart meters, and imitation jewelry.
Most of these products imported from China are either complete or knocked down. A factory in India then assembles them. Umbrellas have been subject to a 20% customs duty, and exemptions on parts of umbrellas have been removed. Loudspeakers mounted or not, have a 20% customs duty, up from 15%. The upcoming hike in import duty for items such as umbrellas. It is in line with the increase in import duty on toys last year. This hike will affect industries that do not deploy any major technologies.
Manufacturers of umbrellas for instance are located in 10 to 12 districts with Kerala being the major manufacturer. The government seems to be protecting these industries. An expert from Mumbai said that the proposal is also in line. The other announcement in the budget of popularizing one station-one product for local businesses and supply chains. As a concept, 1-station 1-product aims to promote a local product from each station on the Indian Railways. By making the station a promotional and sales hub.
Aside from umbrellas, different kinds of headphones and earphones, whether they come with a microphone or not. As well as assets that has both a microphone and loudspeakers. It will also have their customs duties hiked to 20% from 15%. While those on smart meters will rise to 25% from 15%. As part of the Union Budget for 2022-23, the finance minister explained the exemption for implements for the agri-sector. Also, it will be simplified. The government has lowered import duties on diamonds, asafoetida, cocoa beans, methyl alcohol, and acetic acid. While phasing out concessional import rates in capital goods and projects gradually and applying a tariff of 7.5%. The project duty concessions have also deprived local producers of a level playing field. The areas such as coal mining, transmission, power generation, distribution, railway, metro projects, and so on.
These changes in customs duty in budget 2022 apply from 1st February 2022.
|HSN Code||Item Name||Old Duty||Increased Duty|
|54076190||Non-Texturized Lining Fabric||20%||20% or 150 Rs. per KGs whichever is higher|
|95030090||Toys for Manufacturing (Under Import of Goods at Concessional Rate of Duty) Rule 2017||15%||20%|
1.) There is no changes in IGST in budget 2022.
2.) IGST increase on all types of footwear from January 2022.
2.1) If sales value not exceeding Rs.1000 per pair, 12% IGST applicable.
2.2) If sales value exceeding Rs.1000 per pair, 18% IGST applicable.
Our experience suggests reasonable tariffs are conducive to the growth of the domestic industry. As well as ‘Make in India’ without affecting the cost of imports significantly. Imported goods are subject to a single tariff under the Customs Tariff Act, 1975 for faster assessment and clearance. Methyl alcohol (methanol) and acetic acid, among others, now carry duties of just 2.5%-5%, respectively, instead of the previous 10%. The customs duty on certain critical chemicals such as methanol, acetic acid, heavy feedstock for petroleum refining has been reduced. While the duty on sodium cyanide, for which domestic capacity is adequate, has been raised. As a result of these changes, domestic value addition will be enhanced.
Customs duties for steel scrap have previously been exempt, and have been extended for another year. These will likely benefit micro, small, and medium secondary steel producers. There have been several increases in import duties related to almonds, apples, and more since 2005. Pieces of cell phone parts and solar panels have also witnessed frequent hikes. The goal is to protect and promote domestic industry growth. Prior to the large-scale hikes, India’s peak customs duty rate. The highest of all normal rates on non-agriculture products had fallen more than 150% from 1991-92 to 1997-98. It then fell to 20% in 2004-05 and to 10% in 2007-08.
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Certificates From The Concerned Departments
In relation to the following items you will need to obtain certain certificates from the concern department, which we have provided you below :