facebook

01 Oct 2018Posted By: Mudit Handa


Why the Government has hiked import duty on 19 items?

Conducting business internationally not only gives a distinguished status in the local market, besides it assists the budding entrepreneurs and MSMEs to grab the global avenues for business expansion and growth. This further helps in export promotion and boosts the nation’s economy.

Evidently, with a unique Import Export Code, one can seamlessly grow your business at the international platform without any legal hindrances.

As a matter of fact, the policies of our government have always been aimed at augmenting the exports from our nation and to attain a desirable balance of trade.

In an effort to curb the current account deficit (CAD), the government on 26 September 2018 had introduced a hike in basic custom duty on 19 goods that are categorised as “non-core”.

  • Some of them include electronic appliances like air conditioners and washing machines.
  • Very strikingly, basic custom duty has been introduced on ATF (aviation turbine fuel).

 

#1. Which are the goods where import duty has been hiked?

The goods on which the government has hiked the import duty are listed in tabular form as below-

 

S.No.

Particulars

Custom duty (old)<%>

Custom duty (new)<%>

1.       

ACs & Refrigerators

10

20

2.       

Washing machines<10kg

10

20

3.       

ACs & Refrigerators compressors

7.5

10

4.       

Speakers

10

15

5.       

Footwear

20

25

6.       

Radial tyres (car)

10

15

7.       

Diamonds (Non-industrial, cut & polished)

5

7.5

8.       

Diamonds (semi-processed, half-cut/broken)

5

7.5

9.       

Diamonds (lab-grown)

5

7.5

10.    

Colored gemstones (cut & polished)

5

7.5

11.    

Jewelry (of precious metal or metal-clad)

15

20

12.    

Goldsmith or silversmith articles

15

20

13.    

Plastic bathroom ware (e.g. shower-bath, wash-basins, sinks etc.)

10

15

14.    

Plastic package items (e.g. boxes, bottles, cases etc.)

10

15

15.    

Plastic kitchenware, tableware

10

15

16.    

Misc. plastic goods (e.g. stationery, furniture & fixtures, beads & bangles, decorative sheets etc.)

10

15

17.    

Luggage carriers (e.g. briefcase, suitcase, trunks etc.)

10

15

18.    

Aviation Turbine Fuel (ATF)

0

5


 

#2. Why has the government imposed a hike in import duty on aforesaid goods?

The Central government has taken such stiff tariff measures, i.e. hike in the basic customs duties on certain non-core goods, in a bid to address the trade deficit.

The intent of the government, as per a statement by the Finance Ministry, is to bring down the imports on the said items by way of import substitution. These changes are solely aimed at narrowing the Current Account Deficit.

 

#3. What is the Current Account Deficit?

The current account deficit is a unit of measurement of a country’s trade, wherein the total value of the goods and services imported into the nation exceeds the total value of the goods and services exported by it.

Broadly, the current account deficit is the difference between the net inflow and outflow of the foreign exchange in a country’s economy.

 

#4. How much is the Current Account Deficit in India?

The decision of the government to hike custom duty is justifiable as the nation has witnessed a steep rise in Current Account Deficit (CAD) in the recent scenario.  

  • In the Fiscal Year, 2017-18 CAD had risen to 1.9% of GDP, i.e. $48.7 billion.
  • In the FY 2016-17, it had jumped to 0.6% of GDP, i.e. $14.4 billion.
  • As per the global credit rating agencies, India’s CAD is expected to shore up to 2.8% of its GDP by the end of FY 2018-19.


 

#5. How can the problem of CAD be solved?

The only solution to address the adverse impact of the CAD is import substitution. This can be done by boosting the value of its exports with respect to the value of imports by placing restrictions on imports. With this sole objective, the government has imposed hikes in basic custom duty on the specified goods.

 

#6. Will this decision help the economy?

Of course! The current decision will definitely boost the exports from India. This will truly boost the export businesses of electrical appliances such as ACs, washing machines  & Refrigerators, where the duty has been doubled from 10 to 20%.

 

Surprisingly, the import duty @ 5% has been imposed on Aviation Turbine Fuel (ATF). The imports of ATF have put much pressure on the Indian economy in the recent years.

 

This has come as a huge relief for the exporters who can now scale up their business in the aforesaid goods with an IEC registration.

 

In case you need any assistance related to IEC Registration online, feel free to contact us at 8881-069-069.

Give a Reply

Fill up the form

x
E-startupIndia Mobile App

GET E-STARTUP INDIA IN YOUR
pocket!

Download our free Android App and get realtime update on your order status.
Easily connect with our professionals handling your order over chat & mobile.
Never miss business compliances due date with advance notifications.

Get E-startupIndia in your mobile

Why Choose Us

e-startupindia member of GOOGLE

Serving business owners with an Average 4.8+ Google Rating.

e-startupindia certified #AxixBank

Trusted by Axis bank to cater its clients all licensing & compliance needs.

e-startupindia NG Alliance Partner

Providing lending solutions for business needs with NeoGrowth.

e-startupindia Google Partner

Open Neo bank account worldwide & provides cross-border remittance solutions.

e-startupindia member of CII

E-startupindia is a Proudly Member of Confederation of Indian Industry.The CII is a premier business association in India which works to create an environment.

e-startupindia certified #Etstartupindia

E-Startup India is duly certified under GOI's Startup India scheme and is renowned for our tech-driven solutions for business & legal services requirements for MSMEs.

e-startupindia Google Partner

E-Startup India is a Google Partner, which implies we are rigorously involved in assisting SME businesses to market their presence in the digital world.

Popular Services

Private Limited Company | Public Limited Company | One Person Company | Limited Liability Partnership | Partnership Firm | Sole Proprietorship Firm | Section 8 Company Registration | USA Company Registration | UK Company Registration | UAE Company Registration | Singapore Company Registration | Company Registration Hong Kong | Import Export Code | IEC Modification | AD Code Registration | Spice Board Registration | US FDA Certification | ISO 9001 2015 | ISO 14001 EMS | ISO 22000 FSMS | ISO 27001 ISMS | ISO 50001 Energy Management | ISO 45001 | ISO Surveillance | ISO Certification | MSME Registration | FSSAI Registration | Shop Establishment Registration | Barcode Registration | Coffee Board Registration | Startup India Certificate | ZED Certification | Trademark | Trademark Objection Reply | Trademark Opposition | Trademark Hearing | Trademark Formality Check Fail | Website Development | Patent | Copyright | Design Registration | Business Name Suggestion | Logo Designing | Trademark Assignment Service | GST Registration | GST Modification | GST Cancellation | GST Return Filing | GST Invoice Software | UIN Registration | Income Tax Return | Income Tax Notice | Income Tax Refund | Income Tax Assessment | TDS Return Filing | Form 15CA / CB | Professional Tax Registration | 12A and 80G Registration | FCRA Registration | CSR Registration | Project Report | Pitch Deck | Seed Fund Startup India | Accounting for Ecommerce | Virtual cfo services in india | Bookkeeping & Accounting | Private limited Company Annual Compliance | Form INC-22A | Form 15CA / CB | Company Strike Off | Commencement of Business | Fssai annual return | Online CA Consultancy | Income Tax Return Filling | LLP Annual Compliances | Form DIR-3 KYC | Virtual Office for Company Registration | Dubai Company Registration |

IN THE MEDIA

  • e-startupindia South Asia's Leading Multimedia News Agency
  • Business Standard
  • e-startupindia Outlook
  • e-startupindia Htmedia
  • e-startupindia Yahoo News
  • e-startupindia New Delhi Times
  • e-startupindia India.com
  • e-startupindia IBTN9

CONNECT WITH US