Lok Sabha Clears Finance Bill 2025 with Key Tax and Tariff Reforms
Lok Sabha on Tuesday passed the Finance Bill 2025, which has 35 amendments to rationalise tariffs, spur domestic production, and improve ease of doing business. Finance Minister Nirmala Sitharaman, while pointing to the important changes, underscored their implications in reinforcing India's growth story.
A notable feature of the amendments is customs duty rationalization, where seven customs tariff rates are eliminated to eliminate duty inversion and lower input costs. The bill also makes it clear that imports will be charged either a cess or a surcharge so that double taxation is avoided.
To facilitate local manufacturing, the government has exempted customs duty on 35 capital goods utilized for the manufacture of electric vehicle (EV) battery and 28 capital goods for mobile manufacturing. The bill also brings amendments in the safe harbour regime for investment funds, providing increased regulatory certainty and ease of compliance.
Sitharaman emphasized that the reforms bring India's trade and investment policies on par with the world standards and also support indigenous industry development. The Finance Bill 2025 will now be tabled before the Rajya Sabha for assent.
