Financial Daily from THE HINDU group of publications
Saturday, Jun 12, 2004
Financial Daily from THE HINDU group of publications Saturday, Jun 12, 2004 |
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Industry & Economy
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Foreign Trade FTA may hit domestic cos, says CETMA Our Bureau
Kolkata , June 11 THE resultant impact of a Free Trade Agreement (FTA) between India and Thailand and other South East Asian countries on select products which include some of the consumer electronic goods may pose a threat to domestic manufacturers.This is apprehended because customs duty on inputs from these countries would be more than that on finished products. As per FTA, to be effective July, products such as colour television (CTV) and colour picture tube (CPT), on imports from Thailand will be at 50 per cent of the rate applicable in January this year. According to the Consumers Electronics & TV Manufacturers Association (CETMA), CTV and CPT can be imported from Thailand at 12.5 per cent with effect from July 1, while inputs such as tuner and cabinet, basic raw materials such as plastic, copper and zinc will continue to attract the highest slab of 20 per cent. Therefore, the association has urged the Union Finance Ministry to ensure that customs duty on inputs are not more than that on finished products. It is also recommended that the Central Sales Tax (CST) should be abolished as the Centre has already abolished the Special Additional Duty on electronics products. If CST is not abolished, the association feels, the indigenous manufacturers would continue to be at a disadvantage, against the imported products. The customs duty on basic raw material such as plastic, aluminium, copper and zinc is considered very high and varies between 10 per cent and 20 per cent. Since these materials are used in manufacturing, high customs duty increases the cost of inputs, thereby making the domestic products globally un-competitive.
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