The Union Government on September 26, 2018 hiked custom duties 19 items, including jet fuel, ACs and refrigerators to curb imports of non-essential goods. The hike was put into effect from midnight of September 26-27.
The hike is aimed at narrowing the Current Account Deficit. The curbing of non-essential imports is part of the five-pronged steps announced by the government to check the widening Current Account Deficit and capital outflows.
Key Highlights
• The government doubled the import duty on ACs, household refrigerators and washing machines less than ten kilograms to 20 per cent.
• The import duty on speakers and radial car tyres was hiked from 10 per cent to 15 per cent.
• The import duty imposed on footwear was increased from 20 per cent to 25 per cent.
• The government has also announced an import duty of 5 per cent on aviation turbine fuel, earlier it was nil.
• The other items, on which the import duty was increased, include jewellery items, kitchen and tableware, certain plastic goods and suitcases.
• The total value of imports of these items in the last fiscal in 2017-18 was about Rs 86000 crore.
| Custom Duty | |||
| S.no | Item | Current | Revised |
| 1. | Air Conditioner | 10 | 20 |
| 2. | Refrigerators | 10 | 20 |
| 3. | Washing Machines (Less than 10kg) | 10 | 20 |
| 4 | Compressor for ACs, Refrigerators | 7.5 | 10 |
| 5. | Speakers | 10 | 15 |
| 6. | Footwear | 20 | 25 |
| 7. | Radial car tyres | 10 | 15 |
| 8. | Non-industrial diamonds | 5 | 7.5 |
| 9. | Diamonds (semi-processed) | 5 | 7.5 |
| 10. | Lab grown diamonds | 5 | 7.5 |
| 11. | Cut, polished coloured gem stones | 5 | 7.5 |
| 12. | Jewellery- precious metal or metal clad with precious metal | 15 | 20 |
| 13 | Goldsmith or Silversmith wares - precious metal or metal clad with precious metal | 15 | 20 |
| 14. | Shower bath, bath, sink, wash basin of plastic | 10 | 15 |
| 15. | Plastic items- boxes, case, containers, bottles, insulated ware | 10 | 15 |
| 16. | Kitchenware, tableware, household items of plastic | 10 | 15 |
| 17. | Other plastic items- office stationary, fitting for furniture, decorative sheets, statuettes, beads and bangles | 10 | 15 |
| 18. | Trunks, suitcases, brief cases, travel bags and other bags | 10 | 15 |
| 19. | Aviation turbine fuel | 0 | 5 |
Background
The Union Government on September 14, 2018 announced a host of measures to check the rising Current Account Deficit (CAD) and the fall in rupee.
The decisions were taken at a meeting chaired by Prime Minister Narendra Modi in New Delhi to review the state of the economy.
During the meeting, the government decided to cut non-essential imports and increase exports. The move aims to control the current account deficit and bring more dollars into the country.
The CAD, the difference between inflow and outflow of foreign exchange, widened to 2.4 per cent of GDP in the first quarter of 2018-19 from 1.9 per cent in the fourth quarter of 2017-18.
Government announces steps to check rising Current Account Deficit, fall in rupee
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