Finance Minister Nirmala Sitharaman’s maiden Budget Friday exempt defence imports from customs duty, spelling relief for the armed forces that found their buying power diminished by the levy, which they paid along with the goods and services tax (GST).
“Defence has an immediate requirement of modernisation and upgradation. This is a national priority,” Sitharaman’s Budget speech stated. “For this purpose, import of defence equipment that are not being manufactured in India are being exempted from the basic customs duty.”
Till 2016, all defence products were exempt from customs duty. However, their inclusion in the tax regime came to light in May that year, when the customs department stopped the release of spare parts and equipment for the Indian Air Force pending payment. Read more