- Revised customs duty rates to take effect from midnight
- Move aimed at narrowing current account deficit, cutting capital outflows
- Nineteen items added Rs 86,000 crore to import bill in 2017-18
The government on Wednesday announced a hike in customs duty on select items to curb "non-essential imports" and narrow the current account deficit. The move will be applicable to 19 items, including aviation turbine fuel (ATF), and consumer appliances such as television, refrigerator, air conditioner and speakers. The revision in customs duty tariffs - or taxes applicable to imports - will take effect from midnight, an official statement said. The move is in line with the government's aim to bring down non-essential imports to contain the current account deficit and capital outflows.
The total value of imports of these items stood at Rs 86,000 crore in 2017-18, the Ministry of Finance noted.
The import duty was doubled to 20 per cent on ACs, refrigerators, and washing machines of less than 10 kilograms, according to the official statement.
It also announced hikes to the tune of 50 per cent on basic customs duty applicable to speakers, radial car tyres, trunks, suitcases, travel bags, and household items such as shower bath, sink, tableware and kitchenware made of plastic.
|Item||Basic customs duty|
|3||Washing machines less than 10 Kg||10||20|
|4||Compressor for air conditioners and refrigerators||7.5||10|
|7||Radial Car tyres||10||15|
|8||Non industrial diamond (other than rough diamonds), i.e., cut and polished diamond||5||7.5|
|9||Diamonds-semi processed, half cut or broken||5||7.5|
|10||Lab grown diamonds||5||7.5|
|11||Cut and polished Colored gemstone||5||7.5|
|12||Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal||15||20|
|13||Articles of Goldsmith or silversmith wares and parts thereof of precious metal or of metal clad with precious metal||15||20|
|14||Bath, shower bath, sink, wash basin, etc. of plastics||10||15|
|15||Articles of plastics for conveyance and packing such as boxes, case, containers, bottles, insulated ware etc.||10||15|
|16||Tableware, kitchenware and other household items of plastics||10||15|
|17||Miscellaneous items of plastics such as office stationery, fitting for furniture’s, decorative sheets, statuettes, beads, bangles etc.||10||15|
|18||Trunks, Suitcase, Executive cases, Brief Cases, travel bags and other bags etc.||10||15|
|19||Aviation turbine fuel||0||5|
The government introduced a basic customs duty on import of ATF or jet fuel. A basic customs duty of 5 per cent will be applicable on jet fuel, according to the release.
The current account deficit - the difference between inflow and outflow of foreign exchange - widened to 2.4 per cent of GDP in the April-June quarter.
Crude oil prices at new four-year highs along with prevailing weakness in the rupee - which is down more than 13 per cent so far this year - led to widening of the current account deficit. (Read: Why crude oil rates have spiked)
(With agency inputs)