Committee formed to trace products that escaped higher duties due to changes in classification

The Government is looking to raise duties on items not covered by the duty-free Information Technology Agreement of the World Trade Organisation.

This is part of its ongoing drive to restrict rising imports of electronic products to boost domestic industry as well as bring down the current account deficit.

Efforts are on to identify products that are not part of the IT Agreement (ITA) but have escaped higher duties, as the Government has lost track over the years of electronic items that may not be part of the pact, a Commerce Department official told Business Line. This has happened because of several changes in the Import-Export Classification Code for products in India after WTO’s ITA , signed by 29 members including India, was implemented in 1996.

All signatories of the ITA agreed to eliminate duties on identified electronic products.

Changes in code

“Because of the number of changes in product classification, there is confusion on which products are actually part of the ITA.

“We are trying to trace the tariff lines, comparing the latest classification with the earlier ones, to arrive at what products were actually covered originally by the pact,” the official said.

A sub-committee of officials from the Revenue Department, the Commerce Department and the IT Ministry has been formed to examine the present classification of electronic items, including IT products, and trace them back to the 1996 classification.

“Once the exercise is complete, we will decide where all we can increase import duties so that we do not violate WTO rules,” the official said.

Import of electronic products, at $31 billion, accounted for about 7 per cent of total imports in 2012-13.

Imports of the items have already crossed $10 billion in the first four months of the current fiscal, despite efforts by the Government to promotedomestic industry.

The Government is on a drive to check imports to bring down the current account deficit to below 4 per cent of GDP from a high 4.8 per cent in 2012-13, and arrest the rupee slide against the dollar.

(This article was published on September 15, 2013)
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