Union Budget 2024-25 Highlights: Customs Duty Reductions and Tax Simplifications Announced
News Mania Desk/Agnibeena Ghosh/23rd July 2024
In a pivotal announcement on Tuesday, Finance Minister Nirmala Sitharaman revealed key changes in the Union Budget for the fiscal year 2024-25. The proposed adjustments are poised to significantly impact various sectors, including precious metals, telecom, and tax regulations.
Among the major announcements, Sitharaman proposed reducing the basic customs duty on gold and silver to 6%, while lowering the duty on platinum to 6.4%. This move addresses a longstanding request from the gems and jewelry industry and is expected to boost domestic consumption and reduce smuggling of these valuable metals. Additionally, the government plans to remove the basic customs duty on ferronickel and blister copper, which are essential for the production of stainless steel and copper products.
Conversely, the budget outlines an increase in the customs duty on specified telecom equipment from 10% to 15%. This adjustment aims to support the domestic manufacturing of telecom infrastructure and mitigate the reliance on imports, aligning with broader goals of enhancing local industry capabilities.
Finance Minister Sitharaman also introduced plans for a comprehensive review of the Income Tax Act. The goal is to simplify the tax code, making it more accessible and easier to understand. As part of this initiative, the government will create a Standard Operating Procedure (SoP) for handling tax deduction at source (TDS) defaults and rationalize the compounding of such offenses. Moreover, the budget proposes merging two existing tax exemption regimes for charitable trusts into a single streamlined system.
In other notable updates, the government announced the establishment of a ₹1,000-crore venture capital fund dedicated to promoting space technology. This fund is expected to invigorate the sector, fostering innovation and growth. The proposal has been positively received by industry stakeholders, including the Indian Space Association (ISpA) and the Indian National Space Promotion and Authorization Center (IN-SPACe).
The budget also includes measures to cut customs duties on lithium, cobalt, and copper—minerals crucial for energy transition technologies such as nuclear and renewable energy. This reduction aims to support the country’s move towards a more sustainable energy framework.
Several reactions have surfaced following the budget announcement. Sanjiv Puri, President of the Confederation of Indian Industry (CII), praised the budget for its broad investments across various sectors, highlighting its emphasis on simplifying business processes and legislative frameworks. Puri noted the budget’s focus on enhancing ease of doing business and fostering state-level reforms.
Conversely, Uttar Pradesh Chief Minister Yogi Adityanath lauded the budget as a “public welfare budget,” reflecting its alignment with the aspirations of the Indian populace. However, Bahujan Samaj Party (BSP) chief Mayawati criticized the budget for not adequately addressing the needs of the poor, unemployed, and marginalized communities.
The budget also proposes reductions in import duties on mobile phones and related components, reflecting the maturity of India’s mobile phone industry. Additionally, Finance Minister Sitharaman indicated that a new solution for the New Pension Scheme (NPS) would be developed to address pertinent issues while ensuring fiscal prudence.
Overall, the Union Budget 2024-25 introduces several significant reforms and policy adjustments aimed at supporting key sectors and simplifying regulatory frameworks, marking a substantial step towards enhancing economic efficiency and growth.
