Import duty on medical devices raised

The customs department has raised import duty on medical devices used for surgical, dental and veterinary use from the current five per cent to 7.5 per cent (increase of 2.5 percentage points) to help companies manufacture these products in India itself. The move would help Make in India programme in these items.

The step came over a month ahead of the Budget 2016-17, expected to be tabled in Parliament on February 29.

Besides, the government imposed special additional duty on these items of four per cent by withdrawing exemptions, a statement by the finance ministry said on Tuesday.

Also, basic customs duty will be reduced to 2.5 per cent on raw materials, parts and accessories of these items.

The steps would help companies such as Siemens which are into production of medical devices, besides smaller doemstic companies.

M S Mani, senior director, Deloitte in India, said, ·"The increase in the basic customs duty rate on certain medical devices together, with the imposition of SAD, accompanied by a reduction in the customs rates on the raw materials and parts required to manufacture such devices, signifies the government's commitment to encourage manufacturers in India."

These changes are expected to provide impetus to the domestic medical devices sector, support Make in India campaign of the government and generate employment, the finance ministry's statement said.

The government had constituted a task force to examine various issues concerning the domestic medical devices sector. The task force had made certain recommendations regarding rationalisation of the customs duty structure for the sector.

The concessional basic customs duty will continue for equipment in hospitals run by central or state governments or registered societies, rehabilitation aid and other goods for disabled