look news india
The next budget of the central government is set to bring a radical change in the customs duty structure. Notably, a list of sectors has been obtained where manufacturing competitiveness is affected due to inverted duty structure. The government has started taking action to address this problem of the industries. Some of the products listed in the upcoming full budget include washing machines, air purifiers, solar glass, paper, furniture, apparel and jewellery. Some of these products are on the list of Make in India campaign.
Inverted duty structure is a situation where the duty on raw materials is higher than that on finished products. In foreign trade, the duty on finished products is lower than that on raw materials used in its manufacture. Hence local producers suffer losses.
The inverted duty structure in GST tax structure in local taxation makes it difficult for manufacturers to get credit of tax paid on inputs.
Such a structure requires amendment in GST and customs duty for many items. The Ministry of Commerce and Industry has given a list of products that are under inverted duty structure. The list has been compiled in coordination with industry associations and export promotion councils.
In the paper industry, 5 percent duty is levied on finished products and 12 percent on pulp. Due to which the import of finished paper increases. During April to February last year, the total import of this paper including paper board was 3.6 billion dollars. While the import of pulp and waste paper was 1.7 billion dollars. The same is the case with washing machines, air purifiers etc. The same is the case with apparel and clothes. There is a 15 percent duty on solar glass, but domestic industries have to face dumping from China and Vietnam. The Director General of Trade Remedies investigated this.
The problem of inverted duty structure will be resolved
An inverted duty structure is where the duty on finished products is lower than that on raw materials. ? Washing machines, air purifiers, solar glass, apparel, paper, jewellery etc. are listed. ? Some products under Make in India attract special attention.