NEW DELHI: Duty-free purchases for India-bound passengers may be in for some major restrictions, as the Indian Commerce Ministry has proposed a 50 per cent cut in the quota for buying alcohol, besides a complete ban on cigarette cartons.
According to agency reports, the ministry has recommended that the quota be cut from the current two litres per person to one litre, in a bid to reduce import of non-essential goods.
The ministry has also recommended to the Finance Ministry that purchase of cigarette cartons at duty-free shops should be prohibited, Press Trust of India reported. As things stand, inbound international passengers are allowed to buy one carton of cigarettes from duty-free shops.
Alcoholic drinks and tobacco products imported in excess of free allowance are charged customs duty at the rates applicable on commercial imports as per the Indian Customs Tariff Act, 1975.
Besides two litres of alcohol and a carton of cigarettes, other duty-free baggage allowances include gold jewellery up to an aggregate value of Rs 50,000 (in the case of a male passenger) and Rs100,000 (in the case of a female passenger).
Goods purchased over and above the free allowances are charged a customs duty of 35 per cent plus an education cess of three per cent. In effect, this amounts to an extra 36.05 per cent
The latest proposals to further restrict purchase of alcohol and cigarettes come days ahead of the country’s federal budget, which is slated to be announced on February 1. The move to reduce import of non-essential goods into the country is aimed at reining in trade deficit, sources told agencies.
According to the reports, the commerce ministry has also suggested increase in customs duty on several products like paper, footwear, rubber items and toys to promote ‘Make in India’ and boost manufacturing growth.
The ministry has proposed rationalisation of basic customs or import duty on over 300 items from different sectors, including furniture, chemicals, rubber, coated paper and paper boards, they added.