AC, refrigerators to be costlier; gold, silver to be cheaper
New Delhi: 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 percent from 12.5 percent, while the same on LED lamps, parts and spares such as printed circuit boards has also been increased from 5 percent to 10 percent.
Likewise, customs duty on solar inverters has been hiked to 20 percent from 5 percent earlier, and solar lanterns will now attract customs duty of 15 percent.
Sitharaman also announced increasing basic customs duty on raw silk to 15 percent from 10 percent earlier and on cotton to 5 percent from nil earlier.
Imported automobile parts such as safety and toughened glasses, windscreen wipers, signalling equipment will attract higher customs duty of 15 percent, up from 10 percent thereby making the products expensive.
“At present, to encourage domestic production, we are raising duty on solar inverters from 5 percent to 20 percent, and on solar lanterns from 5 percent to 15 percent,” 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 percent 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 percent,” Sitharaman said.
Inputs or raw materials of Lithium-ion battery will now attract customs duty of 2.5 percent from nil earlier and similarly ink cartridges and ink spray nozzle would also attract 2.5 percent custom duty nil previously.
Finished leather products will become expensive as they now attract basic customs duty of 10 percent as against NIL earlier.
On the other hand, customs duty on imported nylon fibre and yarn has been reduced to 5 percent from 7.5 percent.
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 percent from 12.5 percent earlier. Customs duty on gold dore bar has been reduced to 6.9 percent from 11.85 percent and silver dore bar to 6.1 percent from 11 percent earlier.
However, the finance minister announced a levy of agriculture infrastructure and development cess of 2.5 percent.
Basic customs duty on plastic builder wares has increased to 15 percent from 10 percent earlier and cut and polished synthetic stones, including cut and polished cubic zirconia will now attract basic customs duty of 15 percent as against 7.5 percent earlier.
Customs duty on other precious metals like platinum and palladium has been reduced from 12.5 percent to 10 percent.
The government also waived 5 percent health cess on the medical devices imported by the international organisation and diplomatic missions, which is expected to result in bring down the cost.