Finished leather products will become expensive as they now attract customs duty of 10% as against NIL earlier
A large number of commonly used items, including refrigerators, air conditioners, LED lights and mobile phones, will become more expensive due to hike in customs duty on their imported parts, as proposed by Finance Minister Nirmala Sitharaman in the Union Budget for 2021-22.
However, gold and silver will become cheaper as a result of rationalisation in the customs duty on imports of these precious metals.
Customs duty on the compressors for refrigerators and air conditioners has been hiked to 15 per cent from 12.5 per cent, while the same on LED lamps, parts and spares such as printed circuit boards has also been increased from 5 per cent to 10 per cent.
Likewise, customs duty on solar inverters has been hiked to 20 per cent from 5 per cent earlier, and solar lanterns will now attract customs duty of 15 per cent.
Sitharaman also announced increasing basic customs duty on raw silk to 15 per cent from 10 per cent earlier and on cotton to 5 per cent from nil earlier.
Imported automobile parts such as safety and toughened glasses, windscreen wipers, signalling equipment will attract higher customs duty of 15 per cent, up from 10 per cent thereby making the products expensive.
"At present, to encourage domestic production, we are raising duty on solar inverters from 5 per cent to 20 per cent, and on solar lanterns from 5 per cent to 15 per cent," Sitharaman said in her budget 2021-22 speech.
The finance minister has announced hike in customs duty on mobile phone parts like PCBA, camera module, connectors, back cover, side keys and mobile phone charger components of 2.5 per cent from nil.
"Domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers. For greater domestic value addition, we are withdrawing a few exemptions on parts of chargers and sub-parts of mobiles. Further, some parts of mobiles will move from ‘nil’ rate to a moderate 2.5 per cent," Sitharaman said.
Inputs or raw materials of Lithium-ion battery will now attract customs duty of 2.5 per cent from nil earlier and similarly ink cartridges and ink spray nozzle would also attract 2.5 per cent custom duty nil previously.
Finished leather products will become expensive as they now attract basic customs duty of 10 per cent as against NIL earlier.
On the other hand, customs duty on imported nylon fibre and yarn has ben reduced to 5 per cent from 7.5 per cent.
Imported gold and silver will become cheaper as a result of rationalisation in customs duty these precious metals.
Customs duty on gold and silver has been reduced to 7.5 per cent from 12.5 per cent earlier. Customs duty on gold dore bar has been reduced to 6.9 per cent from 11.85 per cent and silver dore bar to 6.1 per cent from 11 per cent earlier.
However, the finance minister announced a levy of agriculture infrastructure and development cess of 2.5 per cent.
Basic customs duty on plastic builder wares has increased to 15 per cent from 10 per cent earlier and cut and polished synthetic stones, including cut and polished cubic zirconia will now attract basic customs duty of 15 per cent as against 7.5 per cent earlier.
Customs duty on other precious metals like platinum and palladium has been reduced from 12.5 per cent to 10 per cent.
The government also waived 5 per cent health cess on the medical devices imported by the international organisation and diplomatic missions, which is expected to bring down the cost.