Major rejig of Customs duty, GST being planned

The government is taking steps to rectify the issue of inverted duty structure affecting various products, impacting manufacturing competitiveness. Identified items include washing machines, air purifiers, solar glass, paper, furniture, apparel, and jewelry, some of which are under the Make in India initiative. Inverted duty structures hinder manufacturers from claiming tax credits on inputs, posing challenges in GST and customs taxation. \r

The Ministry of Commerce and Industry has collaborated with industry associations and export promotion councils to compile a list for addressing this issue, shared with the Finance Ministry. For instance, in the paper industry, higher duties on finished products compared to raw materials lead to increased imports. Similarly, in washing machines, air purifiers, and apparel, the disparity in duties discourages local manufacturing. The government may revisit suggestions from the Commerce and Industry Ministry during budget presentations to tackle this issue effectively.