Changes in Excise, Customs Duty – In Union Budget 2023

Union Budget 2023 introduced several changes in indirect taxation, particularly in excise and customs duties. This post captures key updates and their potential implications. It is to be noted that these changes take effect from 02.02.2023

Following are the changes with respect to Excise Duty:
a) NCCD on cigarettes has been increased. Consequently, Excise duty rates which were previously around Rs 200 to 735 per 1000 sticks has been increased to Rs.230 to 850 per thousand sticks.
b) In order to promote green fuel, central excise duty exemption is provided to blended CNG. exemption amount is equal to GST paid on the compressed biogas contained in the blended CNG.

Following are the changes with respect to Customs Duty:
Item wise changes in customs duty, announced in budget 2023 are summarized for reader’s reference.
a) These are the items for which, an increase in customs duty is applicable:

Category	Item	Old rate (in %)	New rate (in%)
Chemicals	Styrene and vinyl chloride monomer	2	2.5
Petrochemical	Naphtha	1	2.5
Precious metals	Silver plated with that other metals	7.5	10
	Silver in semi manufactured forms
	Powdered forms
	Silver dore	6.1	10
Gems and jewellery sector	Articles made of precious metal such as gold silver platinum	20	25
	Imitation jewellery	20% or ₹400 per kg, whichever is higher	25% or ₹ 600 per kg, whichever is higher
Automobiles	Vehicle in SKD form	30	35
	Vehicle in completely built unit form (CBU)2	60	70
	Electrically operated vehicle in CBU form3	60	70
Others	Bicycles	30	35
	For toys and parts of toys (other than parts of electronic toys)	60	70
	Compounded rubber	10	25% or ₹30/kg, whichever is lower
	Electrical kitchen chimney	7.5	15

Note: 

In addition to the duty mentioned here, agriculture infrastructure development cess (AIDC) and social welfare surcharge, shall be applicable.

*2 Exclusions: other than vehicles with CIF value more than 40000 USD or with engine capacity more than 3000cc for petrol run vehicle and with engine capacity more than 2500 CC for Diesel run vehicles or with both.

*3 Applicable for Electrically operated vehicle in CBU form, with value of more than 40000 USD.

b) These are the items for which, an increase in customs duty is applicable:

Category	Item	Old rate (in %)	New rate (in%)
Agriculture pdts	Pecan nuts	100	30
	Fish meal, krill meal for manufacture of Aquatic feed	15	5
	fish lipid oil, Algal Prime flour for mfr of Aquatic feed	30	15
	Mineral and vitamin premixes for mfr of Aquatic feed	15	5
	Crude glycerin for used in manufacture of Epichlorohydrin	7.5	2.5
	Denatured alcohol for used in mfr of industrial chemicals	5	2.5
Minerals	Acid grade fluorspar(defined composition)	5	2.5
Gems and Jewellery Sector	Seeds meant for use in mfg. of rough lab-grown diamonds	5	Nil
Capital Goods	Specified capital goods for mfr of lithium-ion cell to be used in e-vehicles	Applicable rates for respective items	Nil  (Till 31.03.2024)
Electronic appliance	Heat coil for manufacture of electric kitchen chimneys	20	15
IT & Electronics	Specified Parts for manufacture of  Open cell of TV panel	5	2.5
	Camera lens & its parts for use in cellular mobile phone	5	2.5 (till 31.03.2024)
	Specified chemicals for manufacture of  pre-calcined ferrite powder	7.5	Nil
	Palladium tetra amine sulphate for manufacture of  parts of connectors	7.5	Nil
Others	Vehicles, specified parts &components imported by testing agencies, for   Purpose of testing/certification.  (Subject to T&C)	Applicable rates for respective items	Nil      (Till 31.03.2024)

Note: In addition to the duty mentioned here, agriculture infrastructure development cess (AIDC) and social welfare surcharge, shall be applicable.