Industry & Economy
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Budget
Correct inverted duty structure on capital goods, says Naik
K.R. Srivats
Richa Mishra
New Delhi
,
Jan. 11
THE domestic capital goods sector on Tuesday pitched for rationalisation of the existing customs duty rates on various capital goods so as to provide them with greater effective protection from imports.
Speaking to Business Line after attending the pre-Budget meeting called by the Finance Minister, Mr P. Chidambaram, the Chairman & Managing Director of Larsen & Toubro, Mr A.M. Naik, said that "we had sought rationalisation of duty structure on capital goods and also the need to correct the existing inverted duty structure".
He highlighted that there are different categories of capital goods attracting different rates of zero, five and 10 per cent. "Our submission was that there should be no zero duty imports and they all should converge at one rate say 10 per cent," Mr Naik said.
He also suggested that the import duty on raw materials should be lower than the import duty on intermediates and finished capital goods. Indications are that a case was made for duty exemption on the inputs used by the domestic capital goods manufacturers.
Mr Naik said that he had also raised a number of issues for improving the domestic infrastructure, including the need for better monitoring of various ongoing projects so as to ensure faster implementation.
Industry associations such as the FICCI have been suggesting that the import duty on capital goods, especially in a low tariff regime, needs to be pegged at either 10 per cent or 15 per cent.
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