Union Budget of India 2024: Key Changes in Customs Duty
Posted on July 26, 2024 
The Union Budget for the fiscal year 2024-25, presented by Finance Minister Nirmala Sitharaman on July 23, 2024, introduces significant modifications to customs duties. These changes aim to support domestic manufacturing, align with the Atmanirbhar Bharat initiative, and enhance India’s competitiveness in the global market. Below are the detailed updates and their implications.
Notifications Enforcing Duty Changes
Changes in customs duty rates have been implemented through various notifications, effective from July 24, 2024, unless specified otherwise:
Customs (Tariff)
- Notifications: 29/2024 – 31/2024, 33/2024 – 34/2024, 36/2024 – 39/2024
- Date: July 23, 2024
Customs (Non-Tariff)
- Notification: 51/2024
- Date: July 23, 2024
AIDC (Agriculture Infrastructure and Development Cess)
- Notification: 32/2024
- Date: July 23, 2024
Health Cess
- Notification: 35/2024
- Date: July 23, 2024
Summary of Duty Rate Changes
Agricultural Goods
- Shea nuts: Basic Customs Duty (BCD) reduced from 30% to 15%.
Critical Minerals
- Reduction to Nil: Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, Potash, Rare Earth Elements (REE), Rhenium, Strontium, Tantalum, Tellurium, Tin, Tungsten, Vanadium, Zirconium, Selenium, Cadmium, Silicon (excluding Quartz & Silicon Dioxide).
- Reduction to 2.5%: Graphite, Silicon Quartz, Silicon Dioxide.
Aquafarming and Marine Sector
- Prawn & Shrimp Feed, Fish Feed: BCD reduced to 5%.
- Live SPF Vannamei Shrimp, Black Tiger Shrimp Broodstock: BCD reduced to 5%.
- Artemia and Artemia Cysts: BCD reduced to Nil.
- Ingredients/Inputs for Prawn and Shrimp Feed or Fish Feed:
- Mineral & Vitamin Premixes: From 5% to Nil
- Krill Meal: From 5% to Nil
- Fish Lipid Oil: From 15% to Nil
- Crude Fish Oil: From 30% to Nil
- Algal Prime (Flour): From 15% to Nil
- Insect Meal for R&D in Aquatic Feed Manufacturing: BCD reduced to 5%.
- Single Cell Protein from Natural Gas for R&D in Aquatic Feed Manufacturing: BCD reduced to 5%.
- SPF Polychaete Worms: BCD reduced from 30% to 5%.
- Pre-Dust Breaded Powder for Seafood Processing: BCD reduced to Nil.
Chemicals and Petrochemicals
- Ammonium Nitrate: BCD increased from 7.5% to 10%.
- CTH 3920 and 3921: Tariff rate increased to 25%; PVC Flex Films/Flex Banners will attract 25% by virtue of the Provisional Collection of Taxes Act 2023. Existing rates for other items maintained at 10%/15%.
Drugs
- Cancer Drugs (Trastuzumab Deruxtecan, Osimertinib, Durvalumab): BCD fully exempted.
Textile and Leather Sector
- MDI for Spandex Yarn: BCD reduced from 7.5% to 5%, subject to IGCR condition.
- Real Down Filling Material: BCD reduced from 30% to 10%, for textile or leather garment manufacture for export.
- Wet White Leather, Crust and Finished Leather: Exemption extended for manufacturing textile or leather garments, footwear, or other leather products for export.
- Additional Accessories and Embellishments: Exemption extended for manufacturing textile or leather garments, footwear, or other leather products for export.
Electronics Goods and Equipment
- Cellular Mobile Phones: BCD reduced from 20% to 15%.
- PCBA of Cellular Mobile Phones: BCD reduced from 20% to 15%.
- Chargers/Adapters of Cellular Mobile Phones: BCD reduced from 20% to 15%.
- Oxygen Free Copper (OFC) Strip: BCD reduced from 5% to Nil for resistor manufacturing, subject to IGCR condition.
- Expanded Exemption Entries: Concessional BCD rates extended to mechanics and die-cut parts of chapters 39, 70, and 76.
- Input Items/Raw Material for Connector Manufacturing: Expanded exemption entry.
- PCBA of Specified Telecom Equipment: BCD increased from 10% to 15%.
Precious Metals
- Revised Duty Rates:
| Commodity | BCD | AIDC | SWS | Total Duty |
| Gold Bars | 5% | 1% | Nil | 6% |
| Gold Dore | 5% | 0.35% | Nil | 5.35% |
| Platinum | 5% | 1.40% | Nil | 6.40% |
| Silver Bar | 5% | 1% | Nil | 6% |
| Silver Dore | 5% | 0.35% | Nil | 5.35% |
- Platinum and Palladium for Noble Metal Solutions, Compounds, and Catalytic Converters: BCD reduced from 7.5% to 5%.
- Platinum and Rhodium Alloy Bushings (in exchange for worn out or damaged bushings): BCD reduced from 7.5% to 5%.
Other Metals
- Ferro-Nickel: BCD reduced to Nil.
- Blister Copper: BCD reduced to Nil.
- Ferrous Scrap: Exemption continued up to March 31, 2026.
- Copper Scrap: Concessional BCD rate of 2.5% continued.
- Specified Raw Material for CRGO Steel: Exemption continued up to March 31, 2026; extended to specified raw materials for CRGO Steel under tariff item 7226 11 00.
Capital Goods
- Specified Capital Goods for Solar Cell and Module Manufacturing: Added to exempted goods list.
- Specified Goods for Petroleum Exploration Operations: Added to exemption entry (S.No 404 of Notification No 50/2017-Customs).
Other Items
- Garden Umbrella: BCD revised to 20% or higher (effective from July 24, 2024, by virtue of the Provisional Collection of Taxes Act 2023).
- Lab Chemicals (HS 9802 00 00): BCD increased from 10% to 150% (effective from July 24, 2024, by virtue of the Provisional Collection of Taxes Act 2023).
- Areca Nuts and Prepared/Preserved Areca Nuts: Tariff rate enhanced to 150% from October 1, 2024; effective BCD rate remains at 30%.
In conclusion, the customs duty changes in the Union Budget 2024-25 aim to support domestic manufacturing, correct duty inversions, and promote sustainable trade practices. These measures are anticipated to further the goals of the Atmanirbhar Bharat initiative and enhance India’s position in the global market.
