Govt hikes customs duty on specified medical devices from 5% to 7.5%

The finance ministry on Monday announced an increase in the rate of basic customs duty on certain specified medical device increased from 5 per cent to 7.5 per cent. Simultaneously, the ministry also withdrew the exemption from additional customs duty (SAD) on these medical devices, and they will now attract 4 per cent special additional duty (SAD).

Further, to give fillip to domestic manufacturing, basic customs duty on raw materials, parts and accessories for manufacture of medical devices has been reduced to 2.5 per cent along with full exemption from SAD on such products.

The decision follows recommendations of a task force constituted to recommend ways of promoting the government's 'Make in India' campaign a success.

The task force examined various issues concerning the domestic medical devices sector and had made certain recommendations regarding rationalisation of customs duty structure for the sector, so as to promote domestic manufacturing of 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, a finance ministry release stated.

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, will continue.