Dated: 03.02.2021

Impact on Imports post Union Budget 2021 in India

The Union Budget 2020-21 for FY 2021-22 was placed on the floor of Parliament by the Hon. Finance Minister Mrs. Nirmala Sitharaman. Please have a look at the major highlights as listed below which will impact Import of goods in India.

Key Highlights are listed below that will impact Imports in India:

The Central Board of Indirect Taxes and Customs (CBIC) notified the effective rate of Basic Customs Duty which will be enforced from February 2, 2021. The Government sought to amend the notification No. 50/2017- Customs, dated the 30th June, 2017.

1. No Custom Duty will be applicable on Pulses other than Peas (Pisum sativum), Tur, Chickpeas, Kabuli Chana, Bengal Gram and Masoor (Lentils).
2. 15% of the standard rate of Custom Duty will be applicable on oil other than that of edible grade.
3. No Custom Duty will be applicable on tags, labels, stickers, belts, buttons, hangers or printed bags (whether made of polythene, polypropylene, PVC, high molecular or high density polyethylene), imported by bonafide exporters.
4. 5% Custom Duty will be applicable on the goods used in the printing of newspapers, namely newsprint and other uncoated paper conforming to the specifications of newsprint (other than its surface roughness).
5. 10% Custom Duty will be applicable on all goods other than those suitable for use in motor vehicles falling under heading 8702 or 8704; motor cars falling under heading 8703; and motorcycles falling under heading 8711.
6. 10% Customs Duty will be applicable on Gold or silver findings, which means a small component such as hook, clasp, clamp, pin, catch, screw back used to hold the whole or a part of a piece of jewelry in place.
7. 10% Custom Duty will be applicable on all goods other than SIM socket/other mechanical items (Metal) (7326 90 99) for cellular mobile phones.
8. 2.5% of Custom Duty will be applicable on inputs, parts or sub-parts for use in the manufacturing of Printed Circuit Board Assembly (PCBA) (falling under tariff item 8507 90 90) of Lithium-ion battery and battery pack.
9. 5% Customs Duty will be applicable on Lithium-ion cells for use in the manufacture of battery or battery pack, other than those mentioned against S. Nos. 527A and 527B.
10. No Customs Duty will be applicable on the Components or parts, including engines, of aircraft of heading 8802 for the manufacture of aircraft falling under heading 8802 and for the manufacture of parts of aircraft at (a), imported by Public Sector Units under the Ministry of Defence

Basic Customs Duty exemption withdrawn on specified parts of Transformers

(CBIC) has withdrawn the Basic Customs Duty on specified parts of transformers. The Board further amended notification No. 25/99-Customs dated 28th February, 1999 so as to withdraw BCD exemption on the specified parts of transformers. “In the said notification, in the TABLE, in List A, S. No. 198 and the entries relating thereto shall be omitted,” the notification said. This notification shall come into force on 2nd February, 2021.

CBIC notifies Basic Customs Duty Rates on Electronics items

(CBIC) notified the Basic Customs Duty Rates on Electronics items. The government seeks to amend the notification No. 57/2017-Customs dated 30th June, 2017 in order to prescribe effective rate on Electronics items. The CBIC has notified that 2.5% of Basic Customs Duty will be applicable of on the goods which is used in manufacturing of cellular mobile phones naemley metal shield, Printed Circuit Board Assembly (PCBA), Camera Module, Connectors, Display Assembly, Touch Panel / Cover Glass Assembly and Vibrator Motor / Ringer. The changes in the Basic Customs Duty will be applicable from 1st April, 2021. The notification seeks to insert new S.No.13A which says that 10% Basic Customs Duty will be applicable on all goods other than the following goods, namely Printed Circuit Board Assembly of charger or power adapter; and Moulded Plastic of charger or power adapter.

CBIC notifies effective rate of Agriculture Infrastructure and Development Cess for specified Goods

(CBIC) notified the effective rate of Agriculture Infrastructure and Development Cess for specified goods. The Central Government, on being satisfied that it is necessary in the public interest so to do, exempted goods of the description and falling within the Chapter, heading or sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 from so much of the Agriculture Infrastructure and Development Cess leviable thereon under the said clause of the Finance Bill, 2021, as is in excess of the amount calculated at the rate. The rate of 50% of cess will be applicable on ChickPeas (Garbanzos). The rate of 20% of cess will be applicable on Lentil (Mosur). The rate of 5% of cess will be applicable on Muriate of potash, for use as manure or for the production of complex fertilisers. The rate of 5% of cess will be applicable on Diammonium phosphate, for use as manure or for the production of complex fertilisers. The rate of 2.5% of cess will be applicable on Silver, including silver dore an gold, including gold dore.

CBIC notifies Health Cess Exemption on Import of Medical Devices by International Organizations, Diplomats, Trade Representatives

(CBIC) notified Health Cess Exemption on import of medical devices by international organizations and diplomatic and trade Representatives. The CBIC sought to further amend notification No. 08/2020-Customs dated 2nd February, 2020 wherein the CBIC exempted specified goods from Health Cess imposed on the medical devices. In the said notification, in the TABLE, against Sl. No. 2, in column (2), after item (vi), the following two notifications are inserted. Firstly, Notification No. 84/97-Customs, dated the 11th November, 1997 which seeks to exempt Imports by the United Nations or International organisation for execution of projects in India. Secondly, Notification No. 3/57-Customs, dated the 8th January 1957 which seeks exemption to imports by Diplomats, trade Representatives. This notification shall come into force on 2nd February, 2021.

CBIC inserts High Speed Rail Projects in List of specified projects under heading 9801 of First Schedule under Customs Tariff Act

(CBIC) amended the List of specified projects under heading 9801 of First Schedule under Customs Tariff Act. The Board sought to further amend notification No. 42/1996-Customs, dated July 23, 1996 which notifies projects for assessment under heading 9801. In the said notification, after serial number 42 and the project specified against it, the serial number 43 and the project shall be inserted, namely, “High Speed Rail Projects”. The government has notified the Project Imports (Amendment) Regulations, 2021. In the Project Imports Regulations, 1986, in the TABLE, after serial number 3FF and the entries relating thereto, the serial number 3FFF and entries shall be inserted. The National High Speed Rail Corporation Limited will be the sponsoring authority for the High Speed Rail Projects. This notification shall come into force on the 2nd February, 2021.

CBIC exempts Customs Duty on temporary Imports of Costumes, Props for film-making

(CBIC) exempted the Custom Duty on temporary imports of costumes and props for film-making. The CBIC sought to further amend notification No. 153/94-Customs dated 13th July, 1994 so as to include temporary imports of costumes and props for film-making, in the goods exempted by the said notification. Serial number 4 of notification No. 153/94-Customs dated 13th July, 1994 as amended, extended the said exemption to items ‘costumes and props’ for filmmaking. “In the said notification, in the TABLE, against Sl. No. 4, in column (2), for the words “and sound- recording tapes”, the words, “sound-recording tapes, costumes and props” shall be substituted, the notification said. This notification shall come into force on the 2nd February, 2021.

CBIC amends Customs Notification to clarify Scope of Exemption

(CBIC) amended amends Custom Notification to clarify scope of exemption. The Government seeks to further amend notification No. 24/2005-Customs dated 1st March, 2005 so as to clarify the scope of exemption under entry at S.No. 13S of the said notification. In the said notification, in the TABLE, against S.No. 13S, in column (3), for item (i), the items “Multiple Input/Multiple Output (MIMO) products”; and “Long Term Evolution (LTE) products” shall be substituted. This notification shall come into force on 2nd February, 2021.

Govt. suspends Anti-Dumping Duty on Imports of Steel Products from various nations including China

(CBIC) notified the revocation of anti-dumping duty on various steel products. Firstly, the government announced in its annual budget that it would revoke anti-dumping duties on imports of alloy-steel bars, rods and flat steel products coated or plated with aluminium or zinc until September 30, as part of the 2021-22 federal budget. The changes take effect from February 2, 2021. Secondly, the Anti dumping duty has been revoked till September 30, 2021 on straight length bars and rods of alloy-steel, originating or exported from China, high speed steel of non-cobalt grade, originating or exported from Brazil, China and Germany. Thirdly, the Anti dumping duty has been revoked till September 30, 2021 flat rolled product of steel, plated or coated with alloy of aluminium or zinc, originating or exported from China, Vietnam and Korea. Fourthly, the Anti dumping duty has been revoked till September 30, 2021Certain Hot Rolled and Cold Rolled Stainless Steel Flat Products, originating or exported from China. “MSMEs and other user industries have been severely hit by a recent sharp rise in iron and steel prices. Therefore, we are reducing Customs duty uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels,” said finance minister Nirmala Sitharaman during her budget speech. The Finance minister further added, “to provide relief to metal re-cyclers, mostly MSMEs, I am exempting duty on steel scrap for a period up to 31st March, 2022. Further, I am also revoking ADD and CVD on certain steel products. Also, to provide relief to copper recyclers, I am reducing duty on copper scrap from 5% to 2.5%.” Major stainless steel manufacturers opposed the suspension of anti-dumping duties citing risks of cheap Chinese imports flooding local markets.

CBIC exempts Agriculture Infrastructure and Development Cess on blended Fuels

(CBIC) notified the exemption of Agriculture Infrastructure and Development Cess on blended fuels. The Central Government being satisfied that it is necessary in the public interest to do so, further amended the notification No. 11/2017-Central Excise, dated the 30th June, 2017. As per the notification Nil rate of Agriculture Infrastructure and Development Cess on 5 types of blended fuels. Firstly, 5% ethanol blended petrol that is a blend, consisting, by volume, of 95% motor spirit, (commonly known as petrol), on which the appropriate duties of excise have been paid and of 5% ethanol on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case may be, have been paid. Secondly, 10% ethanol blended petrol that is a blend consisting, by volume, of 90% Motor spirit, (commonly known as petrol), on which the appropriate duties of excise have been paid and of 10% ethanol on Nil which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case maybe, have been paid. Thirdly, 20% ethanol blended petrol that is a blend consisting, by volume, of 80% motor spirit (commonly known as petrol), on which the appropriate duties of excise have been paid and, of 20% ethanol on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case may be, have been paid. Fourthly, 15% methanol blended petrol that is a blend consisting of motor spirit (commonly known as petrol), on which the appropriate duties of excise have been paid and of methanol and co-solvents on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case may be, have been paid. Lastly, High speed diesel oil blended with alkyl esters of long chain fatty acids obtained from vegetable oils, commonly known as bio – diesels, up to 20% by volume, that is, a blend, consisting 80% or more of high speed diesel oil, on which the appropriate duties of excise have been paid and, up to 20% bio – diesel on which the appropriate Central tax, State tax, Union territory tax or Integrated tax, as the case maybe, have been paid. The notification shall come into force on the 2nd February, 2021.

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