Industry keen on FM addressing inverted duty structure in Budget
The Dollar Business Bureau With the deadline for Budget 2015 fast approaching, it is time for pre-budget recommendations especially with respect to the manufacturing industry. With the government’s campaign of ‘Make In India’ (a programme of the government which aims at increasing the share of domestic manufacturing in India's economic growth and create jobs) picking up like wild fire, manufacturers are looking at measures like removal of ‘inverted duty structure’ on key sectors like coir, auto, pharmaceuticals and electronics. Inverted duty structure impacts the domestic industry adversely as manufacturers have to pay a higher price for raw material in terms of duty, while the finished product lands at lower duty and costs less. Several industry bodies have been pressurizing Finance Minister, Arun Jaitley to address this issue in the Budget 2015 and if sources are to be believed, the Minister is not likely to disappoint them. The industry also wants the Finance Minister to address some anomalies on imported raw materials, customs duties as also lowering the Special Additional Duty (SAD). While above mentioned sectors will be given a look in the budget to be presented on February 28, other industry associations representing Coir and Crude Napthalene are also pitching for the removal of inverted duty structure. Recently, concerned over countries like China importing coir raw material from India and exporting finished products to other countries, SN Tripathi, Coir Board Chairman and Joint Secretary in the MSME Ministry has suggested removal of inverted duty structure to protect the interests of domestic coir industry. Sources said, concessions given by India under Free Trade Agreements (FTAs) to its partner countries has also resulted in inverted duty structure that makes Indian manufactured goods (those dependent on imported raw materials) uncompetitive in domestic market.
This article was published on February 16, 2015.