Union Budget 2020-21: Govt may address inverted duty structure to boost manufacturing as part of 'Make In India'
To boost manufacturing as part of the 'Make In India' campaign, the government is expected to address the issue of inverted duty structure, especially in sectors such as chemicals and electronics, in the forthcoming Budget, sources said
-
Inverted duty structure refers to the taxation of inputs at higher rates than finished products that results in a build-up of credits and cascading costs
-
Industry has been demanding that the government should remove the anomalies with regard to taxation of raw material and other inputs
-
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 cost
New Delhi: To boost manufacturing as part of the 'Make In India' campaign, the government is expected to address the issue of inverted duty structure, especially in sectors such as chemicals and electronics, in the forthcoming Budget, sources said.
Inverted duty structure refers to the taxation of inputs at higher rates than finished products that results in a build-up of credits and cascading costs.
Industry has been demanding that the government should remove the anomalies with regard to taxation of raw material and other inputs, the sources said.
Representational image. Reuters.
The commerce and industry ministry has proposed to the finance ministry to address the inverted duty structure on several products such as consoles, panels, certain steel products, calcined alumina, ethyl acetate, and viscose staple fibre, they added.
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 cost.
Further, concessions given by India under free trade agreements to its partner countries has also resulted in an inverted duty structure that makes Indian manufactured goods (those dependent on imported raw materials) uncompetitive in the domestic market.
India has implemented FTAs with many countries including Japan, South Korea and Singapore, and is in discussion with several other nations.
The Index of Industrial Production (IIP) growth during April-November period of the current fiscal came in at 0.6 percent, down from 5 percent in the same period of 2018-19.
also read
Rajya Sabha polls: Close fight for 16 seats in Maharashtra, Karnataka, Rajasthan, Haryana today
Amid allegations of attempts at horse-trading in the polls, Chief Election Commissioner Rajiv Kumar said special observers have been appointed to oversee the election process which will be videographed
Joe Biden calls on Congress to suspend gas, diesel taxes for three month amid soaring prices
The US president called on states to suspend their own gas taxes or provide similar relief, and he delivered a public critique of the energy industry for prioritising profits over production
Nirmala Sitharaman assures 'fullest support' for Sri Lanka's economic recovery
Nirmala Sitharaman conveyed the assurance to Sri Lankan High Commissioner Milinda Moragoda when the envoy met her