New Delhi: Finance Minister Nirmala Sitharaman’s Union Budget 2024 speech on Tuesday brought a wave of relief and optimism across various sectors. Key changes in customs duties are expected to make essential items, including gold, silver, platinum, mobile phones, and cancer drugs, more affordable.
Key Highlights: What’s Becoming Cheaper?
1. Mobile Phones and Accessories:
- Customs Duty Reduction: Basic customs duty (BCD) on mobile phones, mobile printed circuit board assembly (PCBA), and mobile chargers has been reduced from 20% to 15%.
- Impact: This reduction is anticipated to lower the cost of smartphones, promoting affordability for consumers and boosting the ‘Made In India’ manufacturing initiative.
- Industry Reaction: Handset and electronics manufacturers have lauded this move, as it supports the expansion of domestic production and exports, enhancing India’s position in the global value chain.
2. Cancer Drugs:
- Exemptions: Three additional cancer treatment drugs have been exempted from customs duty.
- Impact: This measure is expected to significantly reduce the cost of these critical medications, making treatment more accessible for patients.
3. Precious Metals:
- Gold and Silver: Customs duties on gold and silver have been reduced to 6%.
- Platinum: Customs duties on platinum have been lowered to 6.5%.
- Industry Impact: This long-awaited reduction has been warmly received by the gems and jewellery industry. The announcement led to a surge in the shares of gold and jewellery retailers, with notable gains observed across the sector.
4. Seafood:
- Duty Reduction: Basic customs duty on certain brood stocks, shrimps, and fish feed has been reduced to 5%.
- Market Reaction: Shares of seafood producers and exporters experienced a significant boost following the announcement.
5. Solar Energy Components:
- Customs Relief: The government has proposed not to extend customs duties on solar energy-related parts, expanding the list of exempted capital goods for manufacturing solar cells and panels domestically.
6. Footwear:
- Duty Reduction: Customs duties on manufacturing leather and footwear are set to be cut, potentially reducing costs for consumers and supporting the domestic industry.
7. Critical Minerals:
- Exemptions and Reductions: The finance minister proposed a full exemption on 25 critical minerals, including lithium, copper, cobalt, and rare earth elements, from customs duties. Additionally, BCD on two of these minerals will be reduced.
- Strategic Impact: This move aims to bolster the processing and refining of these minerals, securing their availability for strategic sectors such as nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics.
8. Ferronickel and Blister Copper:
- Duty Removal: Basic customs duty on ferronickel and blister copper has been eliminated, aiding the metals industry.
Key Highlights: What’s Becoming Costlier?
1. Telecom Equipment:
- Duty Increase: The import duty on motherboards (printed circuit boards) has been increased by 5% to promote domestic manufacturing of telecom gear.
2. Ammonium Nitrate:
- Duty Increase: Customs duty on ammonium nitrate will be raised to 10%.
3. Non-biodegradable Plastics:
- Duty Increase: Customs duty on non-biodegradable plastics will also be raised to 10%.
Additional Financial Measures:
- Capital Gains Exemption: The capital gains exemption limit on certain financial assets for the middle and upper-middle class will be raised to Rs 1.25 lakh per year.
- Securities Transaction Tax (STT): A hike in STT on futures and options (F&O) securities by 0.02% and 0.1%.
- Tax on Share Buybacks: Income received from share buybacks will be taxed in the hands of recipients.
- Angel Tax Abolition: To bolster the Indian startup ecosystem, the government will abolish the so-called angel tax for all classes of investors in startups, fostering a more conducive environment for innovation and entrepreneurship.
These strategic adjustments in customs duties and financial policies are poised to stimulate various sectors, drive economic growth, and enhance consumer affordability in India.
Advertisement
