This Article is From Sep 26, 2018

Centre Hikes Import Duty On Jet Fuel, ACs, Refrigerators, 16 Other Items

The government on Wednesday announced hike in duty on 19 import items, with an aim to narrow the current account deficit.

The move will be applicable to 19 items including consumer appliances such as TV and washing machine

Highlights

  • 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.

ItemBasic customs duty
ExistingRevised
1Air conditioners1020
2Household Refrigerators1020
3Washing machines less than 10 Kg1020
4Compressor for air conditioners and refrigerators7.510
5Speakers1015
6Footwears2025
7Radial Car tyres1015
8Non industrial diamond (other than rough diamonds), i.e., cut and polished diamond57.5
9Diamonds-semi processed, half cut or broken57.5
10Lab grown diamonds57.5
11Cut and polished Colored gemstone57.5
12Articles of jewellery and parts thereof, of precious metal or of metal clad with precious metal1520
13Articles of Goldsmith or silversmith wares and parts thereof of precious metal or of metal clad with precious metal1520
14Bath, shower bath, sink, wash basin, etc. of plastics1015
15Articles of plastics for conveyance and packing such as boxes, case, containers, bottles, insulated ware etc.1015
16Tableware, kitchenware and other household items of plastics1015
17Miscellaneous items of plastics such as office stationery, fitting for furniture’s, decorative sheets, statuettes, beads, bangles etc.1015
18Trunks, Suitcase, Executive cases, Brief Cases, travel bags and other bags etc.1015
19Aviation turbine fuel05

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)

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