12 July 2024 Punjab Khabarnama : The Union Budget 2024-25 is likely to eliminate duty anomalies by tweaking the customs rules, retaining certain exemptions, and enhancing compliance, the Economic Times reported, citing anonymous sources.
According to the report, key measures are being deliberated to support domestic manufacturing, ensure smooth compliance, and curb tax leakages.
One major proposal includes the introduction of electronic bank guarantees (BGs) for importers to prevent revenue losses. The use of physical BGs complicates tracking and often results in substantial revenue loss when the differential amount of applicable duty cannot be recovered. An official highlighted that the cumbersome issuance process and tracking of physical BGs often lead to delays and lost revenue for the government.
Additionally, the Centre is planning to retain duty exemptions on certain items and adjusting customs duty rates, particularly on medical equipment and consumer electronics, to bolster the domestic economy. Other proposed measures include improving the duty refund process and reducing the timeframe for updating exchange rates of tariffs.
Discussions also include promoting domestic production by reducing import duties on components for medical devices while increasing duties on finished devices up to 15 percent from 7.5 percent. This adjustment aims to help Indian manufacturers compete effectively with imports of essential supplies like masks and thermometers.
