FM reduces customs duty on petrochemical units

To encourage new investment and capacity addition in the chemicals and petrochemicals sector, Finance Minister Arun Jaitley has proposed a cut in basic customs duty on some petrochemical units. The Budget 2014-15 has reduced basic customs duty (BCD) on certain items to boost domestic manufacture and to address the issue of inverted duties. The Minister said that steps have been taken to boost domestic production of electronic items and reduce our dependence on imports. These includes imposition of basic customs duty on certain items outside the purview of IT agreement, exemption for inputs/components in PC manufacturing from SAD, imposition of education cess on imported electronic products for parity etc.
 
Colour picture tubes have been exempted from basic customs duty to make cathode ray TVs cheaper and more affordable to weaker sections. To encourage production of LCD and LED TVs below 19 inches in India, basic customs duty on LCD and LED TV panels of below 19 inches has been reduced from 10% to Nil.
 
To give an impetus to industry, the Finance Minister said that the basic customs duty on imported flat-rolled products of stainless steel increased from 5% to 7.5%, concessional basic customs duty of 5% extended to machinery and equipment required for setting up of a project for solar energy production, he added.
 
The budget proposes reduction in the basic customs duty from 10% to 5% on forged steel rings, used in the manufacture of bearings of wind operated electricity generators. Concessional basic customs duty of 5% has been proposed on machinery and equipment required for setting up of compressed biogas plants (bio-CNG).
 
Basic customs duty on metallurgical coke has been increased from nil to 2.5% in line with the duty on coking coal. The budget proposes increase in duty free entitlement for import of trimmings, embellishments and other specified items from 3% to 5% of the value of their export for readymade garments.
 
Export duty on bauxite increased from 10% to 20%. To incentivise expansion of processing capacity, excise duty on specified food processing and packaging machinery has been reduced from 10% to 6%.
 
To finance clean environment initiatives, the Clean Energy Cess has been increased from Rs 50 per tonne to Rs 100 per tonne.
 
Budget highlights:

• Total expenditure at Rs 17.9 lakh cr for Fy15
• Plan expenditure at Rs 5.75 lakh cr
• Non-planned expenditure pegged at 12,19,892 cr
• Revenue deficit to be 2.9% in FY15
• FM says target of 4.1% fiscal deficit is daunting but will take on challenge
• FY17 target for fiscal deficit at 3% 
• To complete gas grid in the country, focus on piped gas
• New airports to be developed through PPP mode
• Rs 37500 cr investment in highways and roads; Rs 11,644 cr for 16 new port projects
• Proposes six more textile clusters in Surat, Lucknow and other centres, earmarks Rs 200 cr
• Higher capital ceiling proposed for MSMEs
• Will overhaul subsidy regime, esp food and fuel; new urea policy on anvil
• FM proposes cut in basic customs duty on some petrochemical units
• To cut excise duty on packaging machinery to 6%
• To cut excise duty on food processing to 6% from 10%