Indirect Tax Proposals: Enhancements for Green Mobility, Electronics, and Chemicals

Indirect Tax Proposals Overview

The following outlines various indirect tax proposals aimed at enhancing specific sectors of the economy, including green mobility, electronics, and chemicals.

Green Mobility Initiatives

• Excise Duty Exemption: An exemption from excise duty is proposed for compressed biogas (CBG) that is subject to GST.
• Customs Duty Exemption: It is proposed to exempt customs duty on capital goods and machinery necessary for manufacturing lithium-ion cells used in electric vehicle batteries.

Electronics Sector Changes

• Customs Duty Relief: Relief in customs duty is proposed for the import of certain parts and inputs, such as camera lenses. Additionally, the concessional duty on lithium-ion cells for batteries will be extended for another year.
• Reduction on TV Panel Components: The basic customs duty on open cell parts of TV panels is proposed to be reduced to 2.5% for television manufacturing.

Electrical Appliances Adjustments

• Increased Duty on Electric Kitchen Chimneys: The basic customs duty on electric kitchen chimneys is proposed to increase from 7.5% to 15%.
• Reduction on Heat Coils: There is a proposal to reduce the basic customs duty on heat coils from 20% to 15%.

Chemicals and Petrochemicals Amendments

• Exemption on Denatured Ethyl Alcohol: A proposal is made to exempt the basic customs duty on denatured ethyl alcohol.
• Reduced Duties on Selected Chemicals: The basic customs duty on acid grade fluorspar will be reduced from 5% to 2.5%, and on crude glycerin from 7.5% to 2.5%.

Marine Products Support

• Customs Duty Reduction: A reduction of the basic customs duty on essential inputs for domestic shrimp feed manufacturing is proposed.

Lab Grown Diamonds Considerations

• Reduced Duty on Seeds: There is a proposal to lessen the basic customs duty on seeds utilized in the production of lab-grown diamonds.

Precious Metals Regulations

• Increased Import Duty: The import duty on silver dore, bars, and related articles is proposed to increase. Similarly, the import duty on articles composed of gold and platinum will also see an increase.

Metals Industry Provisions

• Exemption for Raw Materials: The proposal includes an exemption on the basic customs duty for raw materials needed for the manufacturing of CRGO steel, ferrous scrap, and nickel cathodes.
• Continued BCD on Copper Scrap: The basic customs duty of 2.5% on copper scrap is proposed to continue to support secondary copper producers' access to raw materials.

Compounded Rubber Tax Changes

• Increased Duty on Compounded Rubber: The basic customs duty on compounded rubber is proposed to increase from 10% to 25%, or Rs. 30/kg, whichever is lower, aligning it with natural rubber (excluding latex) to prevent duty circumvention.