Govt may increase customs duty on certain components in Union Budget 2021
Union Finance Minister Nirmala Sitharaman will present Prime Minister Narendra Modi-led NDA government's eighth budget on February 1 amid the Covid-19 pandemic and under the unprecedented economic crisis triggered by it. This time, the Central Government may increase the customs duty on certain components, sources told ANI on Wednesday.
According to the sources, to boost the Make in India initiative, the Centre is considering increasing customs duty on certain parts of various components. Sources added that discussion and deliberations on various proposals are still going on, but no final decision had been taken yet.
Last year while presenting her second Budget, Sitharaman had announced customs duty hike on a range of items including toys, furniture, electronic goods, footwear, freezers, refrigerating equipments, grinders and mixers, headphones and earphones, colour TV and chargers.
Customs duty on footwear was hiked from 25 per cent to 35 per cent, toys have seen an increase in duty from 20 per cent to 60 per cent, while customs duty was doubled on freezers, grinders and mixers.
Announcing the customs duty hike on February 1, 2020, Sitharaman had said, Centre's policy of Make in India has started giving dividends. India is now making world-class goods and exporting such products.
"Customs duty is being reduced on certain inputs and raw materials while being revised upward on certain goods, which are being made domestically," Sitharaman had said.
Talking to ANI, Rajat Bose, Partner, Shardul Amarchand Mangaldas and Company said trend has been that the central government usually in the last four-five years is increasing the customs duty on certain items.
However, he added that the imports did not reduce as such.
"So, I think that it will be there at the back of mind of the government. I believe that they would still continue to increase customs duty on raw material components. They might look at sectors such as automobile, consumer electronics and fast moving consumer goods," Bose added.