In the wake of widening current account deficit and falling rupee, the Central government on Wednesday announced a hike in customs duty on selected items. The hike will be levied mainly on aviation turbine fuel (ATF) and consumer appliances such as air conditions, speaker, television, footwear, and refrigerator.
The revised custom duty tariff will be immediately effective. According to a media report by NDTV, These imports account for ₹86,000 crore in 2017- 2018. The change in import duty levied on aviation turbine fuel is most likely to raise airfare in the coming days to 5%. The move is going to put pressure on air industries.
The revised rates of customs duty as of 26.09.2018
|
Items |
Custom Duty |
||
| Existing (%) | Revised(%) | ||
| 1 | Air Conditioner | 10 | 20 |
| 2 | Household Refrigerators | 10 | 20 |
| 3 | Washing Machines less than 10kg | 10 | 20 |
| 4 | Speakers | 10 | 15 |
| 5 | Footwear | 20 | 25 |
| 6 | Radical Car Tyrs | 10 | 15 |
| 7 | Non-Industrial Diamond | 5 | 7.5 |
| 8 | Diamond-semi processed, Half cut or broken | 5 | 7.5 |
| 9 | Lab-grown diamonds | 5 | 7.5 |
| 10 | Cut and polished coloured gemstone | 5 | 7.5 |
| 11 | Articles of Jewellery | 15 | 20 |
| 12 | Articles of Goldsmith | 15 | 20 |
| 13 | Bath, Shower bath, sink of plastics | 10 | 15 |
| 14 | Articles of Plastics: Bottle, containers | 10 | 15 |
| 15 | Tableware and Kitchenware | 10 | 15 |
| 16 | Misc Items of Plastics: Stationery, bangles | 10 | 15 |
| 17 | Trunk, Travel Bags | 10 | 15 |
| 18 | Aviation turbine fuel | 0 | 5 |
| 19 | Compressor for A/C and Fridge | 7.5 | 10 |
Rising import duty was a part of five steps unveiled by the government to defend rupee which has been the worst performing currency of Asia.
The Modi government has recently increased import duty to boost the Make-in-India campaign thereby benefitting the local manufacturing companies. Some of the companies are expecting a price rise in compressors which is likely to have the least price impact. A board meeting headed by PM Narendra Modi pronounced import duty hike to cut non-essential imports to support the rupee. Earlier this month, the government was likely to consider raising steel import duties owing to currency free fall.
TOI quoted ICRA’s principal economist Aditi Nayar who believed that the government move might have a moderate effect on narrowing the current account deficit in FY 18-19.
Rising crude oil price and falling rupee hitting a historical low of 73 against a dollar have forced the government to interfere in the freely playing market sources.