Centre hikes import duty on select goods

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In a move to stabilise the falling rupee and check current account deficit, the government today (September 26) announced hiked customs duties on 19 items including jet fuel, air conditioners and refrigerators. The total value of imports of these items was Rs 86,000 crores, the ministry added.

Previously, Economic Affairs Secretary Subhash Chandra Garg had said that curbing imports through tariffs would help in shoring up the rupee to 68-70 levels against the USA dollar.

The current account deficit was at a fourquarter high of 2.4 per cent of gross domestic product in the April-June quarter on the back of rising crude oil prices However, the impact of these changes is unlikely to be dramatic on locally listed companies.

The government has doubled the customs duty on imported air conditioners, household refrigerators, and washing machine weighing less than 10 kilograms from 10 per cent to 20 per cent. Compressors for air conditioners and refrigerators, on the other hand will attract 10 per cent customs duty instead of earlier 7.5 per cent.

European Union announces legal entity to maintain business with Iran
The rial has lost about two-thirds of its value this year, hitting a record low against the US dollar this month. The US withdrew from the 2015 Iran nuclear deal in 2018.

Basic customs duty of radial auto tyres, jewellery items kitchen and tableware, some plastic goods, as well as suitcases have also been increased.

"The Central Government has taken tariff measures, by way of increase in the basic customs duty to curb import of certain imported items", the government said in a statement. The articles of jewellery, goldsmith and silver wares will now attract a duty of 20 per cent, up from 15 per cent earlier.

"However, this hike in duty may not impact importers who procure from countries with which India now has beneficial free trade agreements", said Abhishek Jain, tax partner, EY. It was nil earlier. These are steps to assure industrialists and others that the government is ready to take steps to get the external account into balance and control the CAD.

The Ministry of Finance issued a notification on Wednesday listing the items that will bear the increase in import duty. The government had chose to raise the customs duty on certain "non-essential" items during the economic review meeting chaired by Prime Minister Narendra Modi earlier this month.

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