FIEO seeks reduction in raw material import duty
Nov 25, 2006 - 10:44:18 PM
, Reviewed by: Priya Saxena
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'High import duty increases the initial project costs and adversely affects the overall competitiveness of the capital-intensive plants like petrochemical plants,' stated FIEO.
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By RxPG News Service,
[RxPG] New Delhi, Nov 25 - Import duty on raw materials should be lowered to promote exports of value-added products, the Federation of Indian Export Organisations - has said in its pre-budget memorandum to the finance ministry.
'It is a well-accepted principle that customs duty on raw material and components has to be at a rate lower than that of finished goods. However, it has been observed that in some cases raw material attracts higher percentage of duty than the finished products,' FIEO stated in a statement Saturday.
It pointed out that while import of raw silk attracts higher duty than silk yarn, in turn the silk yarn attracts higher duty than silk fabric and scarves.
Similarly, ceramic tiles are allowed for import from China at a 5.37 percent basic customs duty, while the same for raw material for manufacturing tiles is 12.5 percent.
Urging removal of the anomalies, FIEO has sought substantial lowering in customs duty on raw material compared to levies on import of finished product.
In the case of capital goods, FIEO has said the customs duty 'in India is much higher than in other Asian countries, where it is between 0-5 percent'.
'High import duty increases the initial project costs and adversely affects the overall competitiveness of the capital-intensive plants like petrochemical plants,' stated FIEO.
'To make the Indian manufacturers competitive cost-wise as well as quality-wise, import duty on capital goods should be lowered from 12.5 percent to 5.0 percent,' has FIEO urged.
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