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Friday, Feb 20, 2004

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CTV picture tube makers want duty `glitch' set right

Richa Mishra

New Delhi , Feb. 19

WITH the implementation of the Thailand Free Trade Agreement (FTA) round the corner, the domestic colour picture tubes (CPT) manufacturers have made a case before the, Tariff Commission to correct the existing duty anomaly faced by the industry.

The recent decision of the Finance Ministry to roll back the customs duty for glass parts, used for manufacture of picture tubes, had upset the CPT industry.

According to sources, players such as Hotline and Samtel Color under the aegis of Electronic Component Industries Association (ELCINA) made the presentation. The players have pointed out that the roll-back of customs duty by the Finance Ministry on glass parts from 10 per cent to 20 per cent, barely a week within its move to cut the duty from 20 per cent to 10 per cent would only create an inverted duty structure.

Based on the industry representations, the Government had referred the matter to the commission to resolve this issue of `inverted duty structure', sources told Business Line.

"The main issue is how to avoid a situation of inverted duty structure, which would lead to the domestic industry becoming uncompetitive once the FTA is operationalised," industry representatives said. In fact, this would squeeze the profit margins of domestic picture tube manufactures, thereby putting them under pressure, they argued.

Elaborating further, industry representatives said, by reversing the duty to 20 per cent, the Government has created a situation where glass from domestic manufacturers would be costlier. In order to make the domestic manufacturing industry competitive, many picture tube and television manufacturers have been consistently making a case for lowering the duty on inputs.

At present, imports of glass parts, CPTs and CTVs attract a uniform 20 per cent basic customs duty.

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