Union Budget 2020-21 – Highlights
Feb. 7, 2020
Members of the Council
Sub : Union Budget 2020-21 – Highlights
You are aware that the Union Budget 2020-21 was presented by Smt. Nirmala Sitharaman, Hon’ble Union Minister of Finance on February 1, 2020. The following are the highlights.
– Rs. 3,000 crore budget allocation to be provided for skill development
– It is proposed to set up an Investment Clearance Cell that will provide “end to end” facilitation and support, including pre-investment advisory, information related to land banks and facilitate clearances at Centre and State level. It will work through a portal
– To achieve higher export credit disbursement, a new scheme, NIRVIK is being launched, which provides for higher insurance coverage, reduction in premium for small exporters and simplified procedure for claim settlements.
– It is proposed to digitally refund to exporters, duties and taxes levied at the Central, State and local levels, such as electricity duties and VAT on fuel used for transportation, which are not getting exempted or refunded under any other existing mechanism. This Scheme for Reversion of duties and taxes on exported products will be launched this year.
– It is the vision of the Prime Minister that each District should develop as an export hub. Efforts of the Centre and State governments are being synergised and institutional mechanisms are being created.
– A National Logistics Policy will be released soon. Inter alia; it will clarify the roles of the Union Government, State Governments and key regulators. It will create a single window e-logistics market and focus on generation of employment, skills and making MSMEs competitive.
– Working capital credit remains a major issue for the MSMEs. It is proposed to introduce a scheme to provide subordinate debt for entrepreneurs of MSMEs. This subordinate debt to be provided by banks would count as quasi-equity and would be fully guaranteed through the Credit Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE). The corpus of the CGTMSE would accordingly be augmented by the government.
– More than five lakh MSMEs have benefitted from restructuring of debt permitted by RBI in the last year. The restructuring window was to end on March 31, 2020. Government has asked RBI to consider extending this window till March 31, 2021.
– An app-based invoice financing loans product will be launched. This will obviate the problem of delayed payments and consequential cash flows mismatches for the MSMEs.
Announcements pertaining to leather, leather products and footwear
The following changes in import duty structure have been notified vide Customs Notification No. 01/2020 dated Feb. 2, 2020 .
– Basic Customs Duty exemption on import of Patent Leather (HS Code 41142010) notified vide Serial No. 286 of Customs Notification No. 50/2017 dated 30.6.2017 removed. Patent leather will have an import duty (Basic Customs Duty) of 10%
– Basic Customs Duty exemption on import of Raw Fur Skins (HS Code 4103) and Tanned Fur Skins notified vide Serial No. 287 of Customs Notification No. 50/2017 dated 30.6.2017 removed. Consequently, Raw Fur Skins under 4301 will have an import duty (Basic Customs Duty) of 15% while Tanned Fur Skins under 4302 will have an import duty (Basic Customs Duty) of 10%
However, as per Customs Tariff, there is no import duty on import of raw furskins of Of lamb (under 4301), the following : Astrakhan, u Free Broadtail, Caracul, Persian and similar lamb, Indian, Chinese, Mongolian or Tibetan lamb, whole, with or without head, tail or paws.
The above changes in Basic Customs Duty have been notified vide Serial No. 22 of enclosed Customs Notification No. 01/2020 dated 2.2.20 (copy enclosed)
– Basic Customs Duty on import of footwear under HS Codes 6401 to 6405 enhanced from 25% to 35%
– Basic Customs Duty on import of footwear components under HS Codes 6406 enhanced from 15% to 20%
The above changes in Basic Customs Duty on footwear has been notified under Clause 115 (A) read with Second Schedule of the Finance Bill 2020 (copy enclosed).
– 10% Concessional Basic Customs Duty for import of notified footwear components provided vide Serial No. 331 of Customs Notification No. 50/2017 dated 30.6.2017 removed. Consequently, all footwear components under 6406 will now attract 20% import duty (Basic Customs Duty).
Members may kindly note the above.
Thanks and regards
COUNCIL FOR LEATHER EXPORTS