ANNOUNCEMENT 04 May 2010

In May 2010, the government of India announced a change in import duties.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising

SOURCE



Union Budget 2010-11, Government of India. Passed in Parliament on 4 May 2010.


Inception date: 04 May 2010 | Removal date: open ended
Still in force

Import tariff

The Union Budget 2010-11 was passed in the Parliament on 4 May, 2010. It announced a host of tariff measures for commodities and services. The budget also announced certain credit incentives for trade. Below is the list of tariff and non-tariff measures that is part of the Union budget.
 

  1. Granting of project import status with a concessional import duty of 5 per cent for the setting up of mechanized handling systems and pallet racking systems in 'mandis' or warehouses for food grains and sugar as well as full exemption from service tax for the installation and commissioning of such equipment.
  2. Granting of project import status at a concessional customs duty of 5 per cent with full exemption from service tax to the initial setting up and expansion of Cold storage, cold room including farm pre-coolers for preservation or storage of agriculture and related sectors produce; and processing units for such produce.
  3. Full exemption from customs duty to refrigeration units required for the manufacture of refrigerated vans or trucks.
  4. Concessional customs duty of 5 per cent to specified agricultural machinery not manufactured in. India.
  5. Concessional import duty was provided to specified machinery for use in the plantation sector in the year 2003. This exemption is to lapse in July 2010. As the modernization of this labour-intensive sector is yet to reach the expected level, this concessional duty is extended up to March 31, 2011 along with a CVD exemption.
  6. In pursuance of Government's resolve to implement the National Solar Mission, a concessional customs duty of 5 per cent is provided to machinery, instruments, equipment and appliances etc. required for the initial setting up of photovoltaic and solar thermal power generating units. These items will also be exempted from Central Excise duty. Similarly, ground source heat pumps used to tap geo-thermal energy would be exempt from basic customs duty and special additional duty.
  7. To encourage the use of bio-degradable materials, the import of compostable polymer is exempted from basic customs duty.
  8. Full exemption from import duty is available to specified machinery for road construction projects on the condition that the machinery shall not be sold or disposed of for a minimum period of five years. The resale of such machinery is also allowed on payment of import duty at depreciated value.
  9. Specified inputs for orthopaedic implants are exempted from import duty as the duty was higher than that on the finished products.
  10. As the film industry has been experiencing difficulties in importing digital masters of films for duplication or distribution loaded on electronic medium vis-ŕ-vis those imported on cinematographic film, owing to a differential customs duty structure, the budget rationalizes this problem by charging customs duty only on the value of the carrier medium. The same dispensation would apply to music and gaming software imported for duplication.
  11. Cable transmission of infotainment is undergoing a transformation with the adoption of digital technology and the multi-service operators need to invest in "Digital Head End" equipment. To enable this, the budget proposes to provide project import status at a concessional customs duty of 5 per cent with full exemption from special additional duty to the initial setting up of such projects.
  12. Gems and jewellery is a traditional item in the export basket. Therefore, the basic customs duty on rhodium - a precious metal used for polishing jewellery, is reduced from 10 per cent to 2 percent.
  13. In order to encourage domestic refining capacity for gold, the budget reduced the basic customs duty on gold ore and concentrates from 2 per cent ad valorem to a specific duty of Rs.140 per 10 grams of gold content with full exemption from special additional duty. Further, the excise duty on refined gold made from such ore or concentrate is being reduced from 8 per cent to a specific duty of Rs.280 per 10 grams.
  14. Full exemption from import duty is available to specified inputs or raw materials required for the manufacture of sports goods which are assuming importance as an export item.
  15. In order to incentivise the domestic production of microwave ovens, the budget reduced the basic customs duty on one of its key components, namely magnetrons from 10 per cent to 5 per cent.
  16. Earlier, there was a value limit of Rs.1 lakh per annum on duty-free import of commercial samples as personal baggage. The budget enhanced this limit to Rs.3 lakh per annum.
  17. The industry had represented that the exemption from special additional duty of 4 per cent based on refunds leads to substantial blockage of funds. To ease this difficulty, the budget provided an outright exemption from special additional duty to goods imported in a pre-packaged form for retail sale. This would also cover mobile phones, watches and ready-made garments even when they are not imported in pre-packaged form.
  18. Reduction in basic customs duty on long pepper from 70 per cent to 30 per cent.
  19. Reduction in basic customs duty on asafoetida from 30 per cent to 20 per cent.
  20. Export of services, especially in the area of Information Technology and Business Process Outsourcing, generates substantial employment and brings in foreign exchange. The budget proposed to ease the process of refund of accumulated credit to exporters of services by making necessary changes in the definition of export of services and procedures.
  21. Government has provided interest subvention of 2 per cent on pre-shipment export credit up to March 31, 2010 for exports in certain sectors. The budget extends the interest subvention of 2 per cent for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises.