By Harpreet Singh
Aping the trend from previous budgets, no major GST developments are expected from the upcoming budget as GST related recommendations are made in GST council meetings and said recommendations are implemented by way of orders/notification throughout the year.
Accordingly, Customs related changes are majorly expected on the present Government’s theme of “Make in India” which involves discouraging imports of finished goods (by increasing duties, removal of exemptions, strengthening FTP provisions) and encouraging imports of raw material (by way of exemptions/concessions /relaxations)
Considering the fact that the Indian economy has been worst hit by the pandemic, efforts are likely to be made by the Government to provide impetus to certain sectors to bring the economy on track. Consumer markets, which has interlinkages with various other sectors of the economy, is one such important area where Government might be focusing in order to stimulate the economy.
Last year, India raised import taxes on a wide range of products such as footwear, furniture, toys, electrical and electronics items by up to 20 per cent. In the current Budget as well, hike in Customs duty on consumer products like furniture, refrigerators and other appliances is expected.
Also, in sync with the past trends, where increased Customs duty was imposed on import of mobile phones with the corresponding introduction of Production Linked Incentive Scheme (PLI) to incentivize domestic manufacturing of mobile phones, there could be an increase in Customs duty on automobiles, air conditioners, LEDs, with PLI schemes expected for these sectors in near future.
(The author is Partner, Indirect Tax at KPMG in India)