𝐒 𝐉 𝐄𝐗𝐈𝐌 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 02.02.2025

Finance Bill 2025: Key Customs duty changes, Import tariff updates, and policy reforms

The Finance Bill 2025 introduces key customs duty reductions on raw materials, EV battery equipment, and railway imports, while increasing duties on luxury vehicles, electronic goods, and personal baggage imports. It also streamlines customs compliance, abolishes the Settlement Commission, and extends reporting timelines, supporting Make in India and trade efficiency.

Below are the key takeaways:

1. Customs & Excise Duty Amendments in Finance Bill 2025

• Changes to Customs Act, 1962, Customs Tariff Act, 1975, Central Excise Act, 1944, and CGST Act, 2017.
• New retrospective service tax exemption introduced under Clause 130.
• Effective rates of duty prescribed via Notifications No. 03/2025-Customs to No. 13/2025-Customs.
• A declaration under the Provisional Collection of Taxes Act, 2023 ensures certain changes take effect from midnight of 1st-2nd February 2025.

2. Key Customs Tariff Revisions

Import Duty Reductions & Exemptions

• Frozen Fish Paste (Surimi) (HS Code 0304 99 00) – BCD reduced from 30% to 5%.
• Fish Hydrolysate (HS Code 2301 20) – BCD reduced from 15% to 5%.
• Glycerol (HS Code 1520 00 00) – BCD reduced from 30% to 20%.
• Marble & Travertine (HS Code 2515, 2516) – BCD reduced from 40% to 20%.
• Liquefied Propane & Butane (HS Code 2711 12 00, 2711 13 00) – BCD reduced from 15% to 2.5%.
• Phosphoric Acid (HS Code 2809 20 10) – BCD reduced from 20% to 7.5%.
• Boric Acid (HS Code 2810 00 20) – BCD reduced from 27.5% to 7.5%.
• Jewelry & Gold/Silver Articles (HS Code 7113, 7114) – BCD reduced from 25% to 20%.
• Footwear (HS Code 6401-6405) – BCD reduced from 35% to 20%.
• Electric Vehicles & Lithium-Ion Battery Equipment – Full duty exemption on capital goods for EV battery production.
• Ethanol for Industrial Use – Full customs duty exemption.
• Railway Equipment (Chapter 86) – Added to customs duty exemption list.

Higher Import Duties for Specific Goods

• Interactive Flat Panel Displays (HS Code 8528 59 00) – BCD increased from 10% to 20%.
• Luxury Vehicles & Motorcycles (HS Code 8702, 8703, 8704, 8711) – BCD increased up to 70%.
• Electronic Toy Parts (HS Code 9503 00 91) – BCD increased to 20%.
• Smart Electricity Meters (HS Code 9028 30 10) – BCD increased to 20%.
• Personal Imports (Baggage) (HS Code 9803, 9804) – BCD increased to 70%.

3. Key Legislative Amendments

Changes in Customs Act, 1962

• Section 18A Introduced – Allows voluntary post-clearance revision of entries.
• Time Limit for Provisional Assessment (Section 18) – Finalization period set at 2 years, extendable by 1 year.
• Customs Settlement Commission Abolished – Replaced by Interim Board for Settlement.

Changes in Excise Act

• Higher Excise Duty on Unblended Diesel Deferred – Additional ₹2/litre duty postponed until 31st March 2026.
• Abolition of Central Excise & Service Tax Settlement Commission from 1st April 2025.

Changes in CGST Act, 2017

• Section 2 Amendments – Expands scope for input tax credit distribution.
• Section 12 & 13 Changes – Time of supply provisions for vouchers omitted.
• New “Unique Identification Marking” (UIM) introduced for track & trace mechanisms.

4. Special Provisions & Industry Impact

• Service Tax Exemption (Retrospective) for Weather-Based Crop Insurance Scheme (WBCIS) & Modified National Agricultural Insurance Scheme (MNAIS) (April 2011 – June 2017).
• New compliance timelines for concessional imports:
  • Quarterly compliance reporting replaces monthly submissions.
  • Utilization period extended from 6 months to 1 year.

Summary of Key Changes

✔ Reduction in import duties for key industrial inputs, fish products, and raw materials.
✔ Higher import duties on luxury vehicles, motorcycles, personal baggage imports.
✔ Full exemption for EV battery production equipment & railway modernization imports.
✔ Legislative changes streamline customs processes, eliminate the Settlement Commission.
✔ Customs reporting shifted to a quarterly basis, reducing compliance burden on importers.

This Article is Authored by: Mr. Ravi Shekhar Jha, BALLB/Mob: +91-9999005379 & his email id is intelconsul@gmail.com

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: Cbic, Ministry of Finance, Govt of India

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