Customs Duty Scrapped on 18 Defence Imports

Quick Summary:

• The Indian goverment has exempted customs duty on 18 defense-related imports, including flight motion simulators, ship-launched missiles, rockets with calibres over 100 mm, remotely piloted military aircraft, and other related equipment like parts and spares for artillery weapons, rifles, and aircraft.
• Additional exempt items include deep submergence rescue vessels, unmanned underwater vessels, high-performance batteries for drones.
• These exemptions also extend to nil Integrated Goods and Services Tax (IGST), aligning with recent GST reductions from 18% to nil.
• The move aims to bolster IndiaS defence modernisation efforts by reducing costs associated with acquiring key equipment.
• Separately, IGST relief is provided on certain imports such as works of art for public exhibition in museums/galleries or antiques if certified by the Ministry of Culture. Earlier exemptions applied only to basic customs duty.

Indian Opinion Analysis:

The decision by the Center reflects a strategic push toward enhancing India’s defence capabilities amidst evolving geopolitical challenges.Exempting customs duty and IGST on critical equipment reduces hurdles in ensuring timely procurement for the armed forces while possibly encouraging domestic development partnerships in long-term supply chains. By integrating tax reforms into its modernisation strategy-such as GST reductions-it signals fiscal prudence alongside prioritising national security goals.

Additionally, IGST relief on cultural items underscores efforts toward fostering public gratitude for heritage preservation without compromising tax revenues unnecessarily. Both measures highlight a balanced approach focused on alleviating cost pressures while supporting broader national interests.Read More