Govt should rationalise customs duty in budget to boost domestic manufacturing: ICC

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Govt should rationalise customs duty in budget to boost domestic manufacturing: ICC

Notification 17 Jul 2024 03:19 PM IST The Hindu BusinessLine

The Indian Chamber of Commerce (ICC) has urged that the government reduce customs tariffs in a variety of sectors, including steel, solar batteries, aluminium, and lithium cells, in order to stimulate domestic production. Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for financial year 2024-25 on July 23.

"Customs duty should be rationalised in these specific industries in a comprehensive manner. There is enormous potential to boost domestic manufacturing and establish India as a global manufacturing hub," said ICC President Ameya Prabhu. Additionally, taxes on raw materials influence domestic players, particularly downstream enterprises.

Speaking on the significance of the aluminium foil business, the President stated that because of anti-dumping taxes on raw materials but not on completed goods, domestic industry has been suffering significant losses while imports from China are duty-free. He also requested a correction in the inverted duty structure by cutting duty on mixed petroleum gas from 5 % to 2%.

He emphasised the need to increase duty on polymers—polyvinyl chloride, polyethylene terephthalate, polypropylene, and polyesters—to 10% to improve domestic manufacturing. This would help reduce import dependency and drive India towards self-sufficiency in the petrochemical manufacturing segment.

On the taxation side, the chamber has suggested setting up a commission to review the Income Tax Act 1961 in its entirety and simplify the provisions, stressing that over the years, amendments have made the act complex to understand, and the resulting anomalies have given rise to a large number of legal cases. It has also directed the government not to impose tax on dividends.

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