Union Budget 2024: Govt reduces customs duties on gold, silver, and electronics

Nirmala Sitharaman with red `Bahi Khata`/ Pallav Paliwal

The government has decreased customs charges on a variety of products, including gold, silver, mobile phones, and electronics, to reduce input costs, increase value addition, improve export competitiveness, and support local production. Finance Minister Nirmala Sitharaman announced the revisions, which include a reduction in the basic customs duty on gold and silver bars from 15 per cent to 6 per cent and on gold and silver ore from 14.35 per cent to 5.35 per cent. The duties on platinum, palladium, osmium, ruthenium, and iridium were decreased from 15.4 per cent to 6.4 per cent, reported PTI.

According to the report, the gems and jewellery industry has long sought reductions to boost exports and manufacturing.

Sitharaman highlighted, in her Union Budget 2024, that these policies are intended to boost domestic manufacturing, promote local value addition, and simplify taxation while benefiting consumers. She also advocated reviewing the rate structure to rationalise and simplify it for ease of trade and to solve duty inversion concerns.

Over the last six years, local production and exports of mobile phones and parts have increased significantly, according to Sitharaman. She advocated cutting the basic customs tariff on mobile phones, PCBAs, and mobile chargers to 15 per cent, the report added.

The PTI report stated that the customs charges are completely waived on 25 important minerals, including cobalt, copper, lithium, nickel, and rare earth elements, which are required for sustainable energy technology and electric vehicles.

To boost the solar energy sector, the list of exempted capital goods used to manufacture solar cells and panels will be increased. However, due to adequate domestic production capability, exemptions for solar glass and tinned copper interconnects will not be granted, the report added.

To boost seafood exports worth 60,000 crores, levies on broodstock, polychaete worms, prawns and fish feed were decreased to 5 per cent. Inputs for prawn and fish feed production were also exempted.

Per the PTI report, to increase export competitiveness in the leather and textile industries, the basic customs tariff on genuine duck or goose down filling material has been reduced.

In the electronics sector, duties on oxygen-free copper for resistor manufacture were eliminated, and certain connector manufacturing parts were exempt. To encourage domestic manufacturing, the tariff on PCBA for certain telecom equipment was raised from 10 per cent to 15 per cent, the report added.

Experts, including Saurabh Agarwal from EY and Tanushree Roy from Nangia Andersen India, praised the changes, stating that they will boost domestic manufacturing, reduce administrative burdens, and improve business predictability, attracting foreign investment and supporting local industries.