Budget 2023: FM Proposes Customs Duty Exemptions to These Goods [Read Finance Bill]

Budget 2023, a milestone for the current government. Union Finance Minister Nirmala Sitharaman presented the full and final budget of 2023 at 11: 00 am on February 1st, 2023.

The Finance Minister proposed certain customs duty exemptions to the goods. While proposing the indirect taxes in the budget, the finance minister stated that the aim is to promote exports, boost domestic manufacturing, enhance domestic value addition, encourage green energy and mobility.

The following goods are ‘Nil rated’ from the customs duty. Also, 3 categories of the goods are only exempted from the Basic Customs Duty till next year only. The goods exempted are under agricultural products, gems and jewellery sector, capital goods, IT and electronics and other goods category.

The goods exempted are: 

1. Denatured ethyl alcohol or use in manufacture of industrial chemicals
2. Seeds for use in manufacturing of rough lab-grown diamonds
3. Specified capital goods/machinery for manufacture of lithium-ion cell for use in battery of electrically operated vehicle (EVs) (up to 31.03.2024)
4. Specified chemicals/items for manufacture of Pre-calcined Ferrite Powder (up to 31.03.2024)
5. Palladium Tetra Amine Sulphate for manufacture of parts of connectors (up to 31.03.2024)
6. Camera lens and its inputs/parts for use in manufacture of camera module of cellular mobile phone
7. Warm blood horse imported by sports person of outstanding eminence for training purpose
8. Vehicles, specified automobile parts/components, sub-systems and tyres when imported by notified testing agencies, for the purpose of testing and/ or certification, subject to conditions. 

Apart from the exemptions, the government proposed to reduce the rate of the Basic Customs Duty on different goods. The aim of the proposals are to increase exports, focus more on domestic manufacturing, add more value addition to the economy and also improve green energy mobility.

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