From ACs, refrigerator to washing machines, Govt hikes custom duty on 19 products

New Delhi, September 27: Taking major decisions in the cabinet meeting, the central government on Wednesday hiked custom duty on 19 products, including refrigerators, washing machine (less than 10 kg), air conditioners and jet fuel as part of its effort to curb import of non-essential items to bring down current account deficit (CAD).

The move will make flying (air traveling) costlier in the country as airlines will pass off an increase in fuel cost to customers. It will also increase the price of imported as well as domestic ACs and refrigerators as customs duty on compressors has also been hiked. These duty hikes come into effect immediately, from Wednesday midnight.

India had imported Rs 86,000 crore worth of these 19 products in 2017-18. Earlier this month, during a meeting chaired by Prime Minister Narendra Modi with finance ministry and RBI officials, it was decided that non-essential import should be curbed to support the rupee which had fallen to a new low.

As per the decision, customs duty on air conditioners, household refrigerators, washing machines (less than 10 kg) has been hiked to 20% from 10%. The duty on compressors for ACs and refrigerators has been hiked to 10 percent from 7.5%. As far as aviation turbine fuel is concerned, a customs duty of 5% has been imposed on it from zero right now.

Customs duty has been hiked on speakers (15% from 10%), on footwear (from 20% to 25%) and radial car tires from 10% to 15%.

On cut and polished colored gemstone, lab-grown diamonds, diamonds-semi processed, half-cut or broken, customs duty has been hiked to 7.5% from 5%. On articles of goldsmith or silversmith wares, customs duty has been hiked to 20% from 15%. For trunks, suitcase, executive cases, briefcases, travel and other bags, a customs duty of 15% will be imposed, up from 10%.

Miscellaneous plastic items such as office stationery, fitting for furniture’s, decorative sheets, statuettes, beads and bangles among others will see a customs duty of 15% against 10% earlier.

The rupee touched an all-time closing low of 72.91 against the dollar on September 12. It closed at 72.6 against the US dollar on Wednesday. The domestic currency has declined by around 6 percent si
August. Crude oil is also hovering at 4 years high pushing pressure on current account deficit.