Budget 2024: Govt plans duty reforms, tax tweaks to boost local manufacturing

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Building a new factory? Budget may extend concessional tax rate for a year The plan is to encourage more value addition in segments where local production is predominantly in the nature of assembling imported components, the person said. Improving ease of doing business and cutting red tape in claiming tax refunds are also high on the government’s priority. Experts said that an amnesty scheme under customs is the need of the hour.

“This would go a long way in resolving legacy litigation and in fostering certainty in doing business. Separately, rate rationalization for certain products is also being looked forward to, specifically where the rate of duty on import of raw material is more than that on import of finished goods," said Abhishek Jain, Indirect Tax Head and Partner at KPMG. An email sent to the spokesperson for the finance ministry and to Central Board of Indirect Taxes and Customs (CBIC) on Tuesday seeking comments on the story remained unanswered at the time of publishing.

In the Union Budget for FY24, the government had cut down the number of basic customs duty rates on goods, other than for textiles and agriculture, from 21 to 13 to simplify the import duty regime. The government may also expand the Authorised Economic Operator (AEO) scheme, granting accredited merchants and logistics players privileges at ports, including quicker clearance and deferred duty payments. The government is exploring free trade agreements (FTAs) with various countries and blocs to boost exports and facilitate trade.