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Starting September 27th, the government has increased the basic customs duty on the import of 19 items which had an import value of Rs.86,000 crore in 2017-18.
The center is increasing the import levy on these items to cut down the CAD (current account deficit) which can curb the falling value of Indian Currency. In an economic review meeting chaired by the Indian Prime Minister, the center had decided to increase the import levy on some ‘non-essential’ items.
In a notification released on Wednesday, the Ministry of Finance listed the items that will attract the increased customs duty.
The customs duty has been doubled from 10% to 20% for imported air-conditioning units, refrigerators for the household purpose, and washing machines with weight less than 10 kilograms. The compressors of air conditioners and refrigerators will also be charged with an increased duty of 10% which was 7.5%.
A 5% duty has been slapped on Aviation turbine fuel (ATF) that was free of customs duty earlier that will increase the cost of air travel. ATF imported in 2017-18 was of $180.85 million.
The customs duty on imported footwear has been increased from earlier 20% to 25%.
The import duty on speakers, radial car tires, plastic-made bathroom fittings, plastic boxes and bottles, as well as tableware, kitchenware and other household items of plastics will now be increased from10% to 15%. Also, miscellaneous plastics items and trunks, suitcase, executive cases, briefcases, travel bags, and other bags which attracted 10% duty will now be levied with 15% customs duty.
From 5%, the customs duty applicable on import of cut and polished diamond, semi-processed, half cut or broken diamonds, lab-grown diamonds, cut and polished colored gemstones has now been increased to 7.5%. A 20% duty will be applicable on goldsmith and silversmith articles and their parts that are constructed or layered with the precious metals from the previous 15% rate.
The center is still planning whether to increase the customs duty on other items. The increase in the import tariff will help to collect Rs 4,000 crore in this fiscal year.