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In a globally integrated business environment, the taxation structure needs to help Indian industry go up the value chain by encouraging the manufacture of value added products. That’s the only way to make industry competitive.

Unfortunately, tyre industry in India is still suffering from inverted duty structure wherein Customs duty on import of natural rubber (principal raw material) is 20 per cent whereas that on the finished product (tyres) is 10 per cent.

This anomaly encouraging the import of tyres rather than domestic production continues for the last several years.

There is urgent need to bring down the customs duty on natural rubber to 10 per cent or alternatively bringing the duty on import of tyres to 20 per cent, at par with import of natural rubber.

In another instance of aberration, Customs duty is levied even on those raw materials used by tyre industry which are not manufactured domestically and import is inevitable.

This unnecessarily adds to the cost burden of industry. There is need for waiver of customs duty on such raw-materials.

R.P. Singhania, Chairman, Automotive Tyre Manufacturers’ Association

More Stories on : Excise and Customs | Rubber | Budget

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