Industry & Economy
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Budget
AC, fridge units seek level-playing field
Our Bureau
Mumbai
,
Feb. 9
THE consumer durables industry , particularly the refrigeration and air-conditioning manufacturers have sought a reduction in tariffs, including the 8 per cent special excise duty in the Finance Bill of 2005-2006.
The industry has also urged the Government to reduce customs duty on imports of compressors and on base metals such as copper, aluminium and plastic to 10 per cent.
"These steps will be in the interests of revenue generation, protection of employment, return on infrastructure investments, prevention of fragmentation of manufacturing activities, and support focus on export,'' the industry said in a news release.
The AC industry has not had as much consumer demand as other segments of the consumer durable industry.
Market penetration of ACs is a dismal one per cent despite fall in prices.
According to the industry, the air-conditioner segment is not on a level playing field with other consumer durables in terms of excise and customs levies.
For the last two years, average growth has been 20 per cent, considerably below the industry's potential.
The tax burden has forced most AC manufacturers to locate units in tax havens - Jammu & Kashmir, Himachal Pradesh and Uttaranchal - to obtain full excise duty exemption.
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