Keeping in view the need of the MSME
sector, Customs duty is being raised on items like footwear (from 25% to 35% on
footwear and from 15% to 20% on parts of footwear) and furniture (from 20% to
25%). While presenting the Union Budget 2020-21 in Parliament today, the Union
Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman said that
special attention has been given to put measured restraint on import of those
items which are being produced by our MSMEs with better quality. She stressed
that labour-intensive sectors in MSME are critical for employment generation.
Cheap and low-quality imports are an impediment to their growth, the Finance
Minister said.
To achieve the twin objectives of giving impetus to the
domestic medical equipment industry and also to generate resource for health
services, the Finance Minister proposed to impose a nominal health cess (at the
rate of 5%), by way of a duty of customs, on the imports of medical equipment
keeping in view that these goods are now being significantly made in India. The
proceeds from this cess shall be used for creating the infrastructure for
health services in the aspirational districts, Smt Sitharaman said.
In the larger public interest, the Union Budget proposed to abolish
anti-dumping duty on PTA (Purified Terephthalic Acid). The Finance Minister
said that PTA is a critical input for textile fibres and yarns. Its easy
availability at competitive prices is desirable to unlock immense potential in
the textile sector which is a significant employment generator.
The Union Budget also proposed to reduce
basic customs duty on imports of newsprint and light-weight coated paper from
10% to 5%. The Minister stated that she has received references saying that
this levy on these items has put additional burden on print media at a time
when it is going through a difficult phase.
The Budget also proposed to raise excise duty, by way of National Calamity Contingent Duty on Cigarettes and other tobacco products. No change is being made in the duty rates of bidis, Smt Sharman said. The Finance Minister said that Customs duty rates are being revised on electric vehicles, and parts of mobiles as part of such carefully conceived Phased Manufacturing Plans.
The Finance Minister said that Union
Budget proposes to incorporate suitable provisions in the Customs Act and added
that in the coming months, there will be a review of Rules of Origin
requirements, particularly for certain sensitive items so as to ensure that
Free Trade Agreements (FTAs) are aligned to the conscious direction of our
policy. The Minister added that it has been observed that imports under FTAs
are on the rise, undue claims of FTA benefits have posed a threat to the
domestic industry. “Such imports require stringent checks”, Smt Nirmala
Sitharaman said.