Custom duty cut in select sectors will promote domestic industry, create jobs: Sitharaman
Aug 07, 2024
New Delhi [India], August 7 : Responding to the questions raised on indirect taxes in the Finance Bill on Wednesday, Finance Minister Nirmala Sitharaman said that the government has brought in transformational changes to enable growth and employment in the country.
She said these measures aim to facilitate international trade by simplifying and expediting processes, ultimately reducing logistic and compliance costs. The overarching goal is to enhance domestic production and increase export competitiveness, she said.
As part of the budget announcements, new customs duty rates are proposed for commodities ranging from life-saving medicines to rare earth minerals to promote domestic production, export competitiveness and creating employment opportunities.
Highlighting the rationale behind the recent customs duty reductions on various items listed in the budget, Sitharaman emphasized that these cuts are intended to lower the prices of raw materials and inputs, making domestic production more cost-effective.
According to the FM the moves are expected to promote trade and employment in the country.
Specifically, the Finance Minister pointed out that the proposed rate cuts on certain inputs for labor-intensive industries, such as leather and textiles, are designed to boost job creation and address duty inversion issues that have long plagued the textile sector.
Sitharaman also said that the exemptions and reductions on 27 critical minerals, including lithium and cobalt, which are essential for India's strategic autonomy. These minerals are not produced or found dometically.
These minerals are vital for various industries, including electronics and renewable energy, underscoring the government's commitment to supporting emerging sectors.
On reductions of duties on precious metals like gold and silver the finance minister said this is to promote Gems and Jewellery sector which is an export oriented sector which also creates lots of jobs.
Customs duties on gold and silver have been reduced from 15 percent to 6 percent, while those on platinum have been reduced from 15.4 percent to 6.4 percent, to enhance domestic value addition in Gold and precious metal jewelry in the country.
To promote marine industry exports particularly the aqua farming industry duty is cut. The fish feed are exempted from customs duty to further boost the seafood exports.
Sitharaman said that the duty cuts on certain inputs are crucial for maintaining high standards of marine exports, especially shrimp. Despite domestic capacity being in its nascent stages, these cuts are designed to ensure that marine exports do not suffer, reflecting the government's responsiveness to industry requests for critical raw material imports.
.Furthermore, the Finance Minister stated that a comprehensive review of the tax structure over the next six months will be made, aiming to develop a more simplified tax regime for the entire country.
