Zero Custom Duty On 35 Capital Goods Will Save Industry Millions!

The Department of Heavy Industry (DHI) has exempted 35 of the capital goods used in manufacturing electronic goods from basic custom duty (BCD). This is to promote domestic manufacturing. Relief from duty on high-investment machinery is expected to lead to a major reduction in capital expenditure for businesses.

- Baishakhi Dutta

In a notification dated September 28, 2018, the finance ministry exempted 35 items such as printed circuit board (PCB) coating machines, and PCB assembly loaders and unloaders from basic custom duty. These 35 capital goods (mentioned in the circular with Notification No. 71/2018) are used for manufacturing components such as lithium-ion batteries, speakers and receivers for mobile phones, data cables, etc. Industry body ELCINA expressed its appreciation of the notification, with a spokesperson saying that all the goods in the new list have HS Codes (the codes required for imports) at the eight-digit tariff level, which will aid in fast customs clearance.

The background

Recently, various electronics associations had raised their concerns about many new capital goods that were not covered under the original customs notification (No. 25/2002). According to them, these needed to be exempted from the basic custom duty (BCD) to encourage the manufacturing landscape of the country. So the associations and industry bodies listed a total of 200 such capital goods, of which 35 items have been accepted for the exemption, with effect from September 2018.