In a positive development for the scientific community, the finance ministry has reversed a customs duty hike on laboratory chemicals. The recent Union budget increased customs duty on these chemicals from 10 per cent to 150 per cent, disrupting research budgets.
On July 31, TOI reported that the customs duty on approximately 40,000 items had been raised from 10 per cent to 150 per cent.
However, late Wednesday, the finance ministry announced that all chemicals, except undenatured ethyl alcohol, intended for research and development will continue to attract only a 10 per cent customs duty.
The ministry stated that this “amendment” in the notification was made in the “public interest” and took effect on Thursday. Additionally, a penalty clause has been introduced for those attempting to import these chemicals as meant for research fraudulently. Importers are required to submit an undertaking before the deputy commissioner of customs or the assistant commissioner of customs, declaring that the imported goods will be used in laboratories or for research and development purposes and will not be sold or traded after importation. If the chemicals are found to be used for other purposes, a higher customs duty rate will be applied.
The scientific community welcomed the amendment reducing the customs duty. Government sources noted that most chemicals attract duties of 2.5 per cent, 5 per cent, 7.5 per cent, or 10 per cent. Some importers had been misdeclaring undenatured ethyl alcohol as lab chemicals to avoid the 150 per cent duty on undenatured ethyl alcohol.
To prevent this misuse, the 2024-25 budget increased the Basic Customs Duty on lab chemicals under CTH 9802 to 150 per cent. However, to address the concerns of genuine users, the Basic Customs Duty on lab chemicals under CTH 9802 (excluding undenatured ethyl alcohol of any alcoholic strength) for use in laboratories and research and development purposes has been reduced to 10 per cent.
