Customs Duty Revisions Will Improve Optics

Central Board of Indirect Taxes & Customs (CBIC) chair Sanjay Kumar Agarwal speaks to Pushpita Dey about the effects of the customs rate rationalisation in the Union Budget. Edited excerpts

- Pushpita Dey

The customs-rate changes and duty exemp- tions will lead to a revenue loss of Rs 2,600 crore. How will CBIC make up?

As part of the customs-duty rate rationalisation in the Budget, we have exempted surcharge on some items that were subject to both cess and surcharge. Also, wherever we have brought the items to lower tariff slabs, we have imposed an equivalent amount of agriculture infrastructure development cess to keep the duty incidence level the same, except for certain items, where it is slightly lower. This is resulting in a revenue loss of Rs 1,900 crore.

Additionally, in the Budget, there are certain items on which exemption has been provided to promote the Make in India initiative or exports. By this entire exercise, including the rate rationalisation, the loss of customs duty is to the tune of Rs 2,600 crore.

That is slightly more than 1% of the customs-duty realisation in the previous year, which was Rs 2.3 lakh crore. This loss has been factored in the Budget estimate of next year's revenue realisation from customs duties, which is Rs 2.4 lakh crore.