Budget 2027: Customs duty relief on 118 goods under review

New Delhi: The government has begun a review of basic customs duty concessions and exemptions currently applicable to 118 products as part of the budget 2027-28 exercise, people familiar with the discussions said.

The list includes goods required to set up power projects, components for panel display modules, textile machinery, battery scrap, certain photovoltaic cells, drugs and optical fibre cables. The exercise covers a statutory review of concessions expiring on March 31 and September 30, 2027.

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The basic customs duty rate ranges up to 30% on these goods. Respective line ministries have reached out to industry seeking their inputs on whether these exemptions and concessional rates should continue, be withdrawn or allowed to lapse. "Industry has been asked for detailed justification supported by data on domestic production, imports, existing capacity and planned investment in these goods," said one of the people.

Customs duty concessions and exemptions on 32 products such as certain fish oil, shuttleless looms and open cell used to manufacture interactive flat panel displays are up for a statutory review. The government is also reviewing unconditional exemptions given to 86 goods, including fuel oil, some medicines, urea, stents, probiotics, waste and scrap of critical minor metals such as gallium and germanium and waste of lithium-ion batteries.

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Unconditional exemptions are full waivers of duty without requiring importers to fulfil post-import conditions. "Duty review and rationalisation is a routine exercise done to correct the inverted duty structure and promote local manufacturing," said an official.

A major theme of budget FY27 was tariff rationalisation with many conditional and unconditional exemptions reviewed, several extended and sunset clauses removed. The measures included selective rate changes, such as withdrawal of certain concessional or nil duties, extension of benefits for exports, renewable energy, semiconductors, pharmaceuticals, medical devices, aircraft manufacturing and MRO, nuclear power and electric mobility. Specific duties for certain consumer goods such as umbrellas were revised.