Lok Sabha Approves Finance Bill 2025 with Major Amendments

The Lok Sabha passed the Finance Bill 2025 on Tuesday, March 25, incorporating 35 government amendments aimed at tariff rationalisation, reducing input costs, and supporting domestic manufacturing.

Finance Minister Nirmala Sitharaman highlighted the government’s commitment to promoting India’s industrial growth and ensuring a balanced taxation structure while discussing the bill in Parliament.

Tariff Rationalisation and Duty Adjustments

Sitharaman reiterated that the customs duty rationalisation announced in the Union Budget 2025 is progressing as planned. As part of this effort, the government is removing seven customs tariff rates to correct duty inversion and lower input costs, ensuring a more streamlined import duty structure.

Additionally, the revised Finance Bill mandates that imports will attract either a cess or a surcharge, but not both, to eliminate tax redundancies and ease compliance for businesses.

Exemptions for Key Manufacturing Sectors

To further promote domestic manufacturing, the government has exempted customs duties on 35 additional capital goods used for electric vehicle (EV) battery production and 28 capital goods related to mobile manufacturing.

These exemptions are expected to enhance production capabilities and reduce costs for manufacturers in these high-growth sectors.

Simplified Safe Harbour Regime for Investment Funds

The Finance Bill 2025 also includes amendments to the safe harbour regime for investment funds, aiming to provide greater clarity and ease of doing business for investors.

These adjustments are designed to make India a more attractive destination for foreign investments by simplifying compliance requirements.

Strengthening India’s Trade and Investment Policies

Sitharaman emphasised that these changes are part of a broader effort to align India’s trade and investment policies with global standards. The government remains focused on ensuring a fair taxation system while simultaneously promoting domestic industry and economic growth.

The amendments in the Finance Bill 2025 are expected to have a significant impact on India’s manufacturing, trade, and investment landscape, reinforcing the country’s position as a competitive and business-friendly economy.

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