Tag: Budget 2021 Custom Duty

Union Finance Minister, Nirmala Sitharaman, on Monday, unveiled the Union Budget for the fiscal year 2021-22 that aims to shore up an economy badly-hit by the novel coronavirus pandemic. In a bid to promote domestic smartphone manufacturing, FM Nirmala Sitharaman announced the removal of a few custom duty exemptions on importing parts of mobile chargers and sub-parts of mobile phones. In addition, custom duty on some parts of the handsets is to move from nil rate to a "moderate 2.5 percent". Some of these changes coming into effect from February 2, and the rest from April 1. Here we have some comments from industry people on what they think about the Budget 2021: Nitin Kunkolienker, President MAIT said, “MAIT welcomes the continued focus of the Government on PLI and it is very encouraging. PLI will help achieve scale, and job creation for the youth of India. We look forward to the upcoming PLI including the electronics industry sub-sectors PCs, Datacom, Servers, Wearables, Telecom products, Smart meters and components. We are happy to see the continued emphasis on the adoption of technology into economic activities. The National Language Translation Mission, earlier proposed by MEITY, will enable Bharat on the digital highway allowing the masses to take ride on the digitization of the economy.” Kunal Lakhara, VP of Finance and Operations, Pocket Aces said, “The Union Budget 2021-2022's revised fiscal deficit estimate for FY21 which is pegged at 9.5% of GDP seems promising, and has taken on a realistic approach that is focused on spends which are much needed to revive the economy. The tax holiday given to startups for an additional one year brings relief to enabling the sector to sustain and grow, as we recover from the pandemic. Furthermore, the move to encourage one-person companies without any restrictions is a step in the right direction. This will go a long way in encouraging more people to come forward to set up innovative businesses that solve the challenge of the day, and grow the high-potential startup ecosystem within the country.” Ajay Data, Founder & CEO, VideoMeet said, “The announcement by the Honorable Finance Minister regarding the startups was much required at the moment and will help the fledgling startups with meager resources to continue with their business operations without worrying about the compliance with complex taxes. The announcement comes soon after Prime Minister announced setting up of Rs 10,000 crore fund for seed funding of startups. These moves by the government make the intent of government clear that it wants to promote entrepreneurship and help the enthusiastic young entrepreneurs in the country. The setting up of separate administration structure to promote ease of doing business is a laudable move by the FM. Also, as predicted startups were given importance under this budget, and the industry is poised to be greatly benefited with the Tax holiday extended by another year till 31 March 2022.” Dhruv Agarwala, Group CEO, Housing.com said, “Amid a sharp improvement in consumer sentiment with regard to property purchases post the start of the COVID-19 vaccine rollout, the government’s move in the Budget to extend the benefit of additional Rs 1.5 lakh tax deduction on home loan interest, until March 31, 2022, will act as a further impetus to the residential property sector. This move will augur well, especially for the affordable housing segment, which will also benefit from the decision to offer a tax holiday for affordable housing projects for one more year, to boost supply. The support announced today by the Honourable Finance Minister for rental housing too will go a long way in boosting the real estate market and will ease a lot of pressure points in the rental home market. This will also help migrant workers to a great extent and will support them in remaining in metros and other big cities during times of financial hardships such as the one presented by the Covid-19 pandemic. However, the long-standing demand of the real estate industry to expand the definition of affordable housing so as to include homes priced more than Rs 45 lakhs in big metro cities, has sadly not been addressed.” Paavan Nanda, Co-Founder, WinZO Games said, “The measures announced by the government demonstrate its bullishness towards the startup ecosystem. The extension of long-term capital gains by another year will offer tailwinds to early stage funding. Extension of tax holiday by one year is also an encouraging offering, however, most of the new age startups don't start booking profits in the early years. The Budget’s focus on economic development, infrastructure and health will definitely put India back on the growth trajectory after an unprecedented past financial year.” Rakesh Deshmukh, Co Founder and CEO, Indus OS said, “The announcement of the National Language Translation Mission is a much needed effort by the government to reach our citizens in the language they understand. At Indus App Bazaar, the usage of apps in Indian languages on our platform has increased 2.2 times last year. We believe that with an enhanced app store ecosystem we will be able to break linguistic barriers and adding more value to the next half a billion Indian customers. Moreover, for Atma Nirbhar Bharat to be successful, the focus should be on technology innovation as a whole. We appreciate the government’s focus on innovation and R&D in the budget 2021.” Mike Chen, General Manager, TCL India said, “We do welcome the recent PLI scheme of the government. However, we need to ease up the duty imposed on raw materials keeping in mind the make in India thought. We should also be getting added incentives so that transformative measures can be taken. The industry contributes 25% of the country's GDP.” Akhilesh Chopra, Sales Director at Bluei said, “Mobile, charges and power banks can be expensive in the coming times. This is because Finance Minister Nirmala Sitharaman has proposed to increase customs duty (import duty) on mobile phones and power bank sub-parts for FY 2021. The aim is to promote local manufacturing in the country, the rebate on all parts of mobile phones and parts of chargers is being withdrawn. Now 2.5% import duty will be levied some parts of mobile phones and chargers will now be subject to 2.5% customs duty. Till now, there was no duty on these parts. Increasing custom duty will certainly make it expensive for the companies to procure these mobile parts. To make up for this, mobile companies may increase the prices of mobile and power bank in the coming time. The motive behind increasing customs duty is that the government should manufacture these parts in the country. And the pandemic has provided the center an opportunity to attract global manufacturers and make the country a manufacturing hub emerging as an alternative to China.”

Tag: Budget 2021 Custom Duty

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