Govt hikes basic customs duty on medical devices

Based on recommendations of a task force constituted for giving suggestion to boost the domestic medical devices sector, the government has decided to raise the rate of basic customs duty on certain specified medical device increased from 5 percent to 7.5 percent. Simultaneously, the exemption from additional customs duty (SAD) on these medical devices has also been withdrawn. These devices will now attract 4 percent SAD.
 
Further, to give fillip to domestic manufacturing, basic customs duty is being reduced to 2.5 percent along with full exemption from SAD on raw materials, parts and accessories for manufacture of medical devices, falling under headings 9018 to 9022.
   
In line with its ‘Make in India’ campaign, the Government of India had constituted a task force to examine various issues concerning the domestic medical devices sector. The task force had made certain recommendations regarding rationalisation of customs duty structure for the sector, so as to promote domestic manufacturing of medical devices. Taking into consideration the recommendations of the task force, the government has made changes in the basic customs duty and SAD on certain specified medical devices.
 
“These changes are expected to provide impetuous to the domestic medical devices sector, support Make in India campaign of the Government and generate employment,” said a Finance Ministry press release.
 
The concessional basic customs duty on hospital equipment for use in hospitals run by central or state government or registered societies, and specified assistive devices, rehabilitation aids and other goods for disabled will, however, continue.