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Informist, Saturday, Feb. 1, 2025

--BUDGET: Exempt social welfare surcharge on 82 tariff lines 
--BUDGET: Will have only 8 tariff rates under customs, including zero rate 
--BUDGET: Only 8 tariff rates to remain, including zero tariff 
--BUDGET: Propose to remove 7 tariff rates from customs 

--BUDGET: Proposals on customs aim to rationalise structure 

NEW DELHI – The government will lower the number of customs duty rates to eight, including the zero rate, from the current 15, Finance Minister Nirmala Sitharaman announced in her speech while presenting the Budget for 2025-26 (Apr-Mar). This is in line with Sitharaman's announcement in July that the government would review the customs duty structure.  

The government also announced it will levy only one cess or surcharge on tariff lines subject to cess. As such, the government aims to exempt the social welfare surcharge on 82 tariff lines. "I propose to apply appropriate cess to broadly maintain effective duty incidence except on a few items, where such incidence will reduce marginally," Sitharaman said in the Budget speech for FY26. 

The government had announced a comprehensive review of the customs rate structure in the full Budget for FY25. It had also removed seven duty rates in July. Rationalisation of the customs duty structure has been a long-standing demand of industry. In their presentations to the finance minister before the Budget, the Confederation of Indian Industry and the Federation of Indian Export Organisations had suggested the government should address duty inversion in customs rates. 

"My proposals relating to customs aim to rationalise tariff structure and address duty inversion," Sitharaman said Saturday. Duty inversion refers to a situation where raw materials attract higher duty than the finished goods.  End

Reported by Krity Ambey

Edited by Avishek Dutta

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