India’s Union Budget includes Goods and Services Tax rate changes and simplifications
India’s Finance Minister, Nirmala Sitharaman, published the 2024 – 25 budget on 25th July. Aside from a range of GST simplifications, it also included wider administrative changes for the Finance Bill 2024. India implemented GST in July 2017
There were a range of proposals for changes in indirect taxes, focusing on GST and customs duties:
- GST: Simplification and expansion of the GST structure to other sectors to multiply its benefits. This includes talks for August looking at consolidating the GST rates from four to three.
- Customs Duties: Proposals aim to support domestic manufacturing, enhance local value addition, promote export competitiveness, and simplify taxation while considering public interest.
- Sector-Specific Changes:
- Medicines: Exemption for certain cancer drugs.
- Mobile Phones: Reduction in BCD to 15% for phones, PCBA, and chargers.
- Critical Minerals: Exemption for 25 minerals crucial for strategic sectors.
- Solar Energy: Expanded exemption list for solar cell manufacturing.
- Marine Products: Reduced BCD on inputs for shrimp and fish feed.
- Leather and Textiles: Reduced BCD on specific materials to boost competitiveness.
- Precious Metals: Lower customs duties on gold, silver, and platinum.
- Other Metals: Removal of BCD on ferro nickel and blister copper.
- Electronics: Exemptions for parts used in manufacturing connectors and resistors.
- Chemicals and Petrochemicals: Increased BCD on ammonium nitrate.
- Plastics: Raised BCD on PVC flex banners to curb imports.
- Telecommunication Equipment: Increased BCD on PCBA for specified telecom equipment.
- Trade Facilitation: Extended periods for export and re-import of goods for repairs.
These measures aim to streamline tax structures, support key industries, and enhance the ease of doing business in India.
In the budget, the 2% e-commerce equalisation levy was scraped.
