The domestic latex industry has asked for immediate correction in inverted duty structure on natural rubber latex on the lines of natural rubber done recently.
The All-India Rubber Industries Association (AIRIA) said that the latex prices continued to rise over the last two years and even its availability has been a serious concern.
However, the import duty on latex stands at 70 percent while that on finished products is less than 7.5 percent. The recent budget announcement also did not offer any solace to the industry in respect of reducing customs duty on latex, it said.
“It is surprising that the import duty on latex has been gradually enhanced from 25 per cent in 1999-2000 to 70 percent while that on finished goods has been reduced from 40 percent to less than 7.5 percent during the same period. The facilitated import of finished goods is antithetical to the government's avowed policy of enhancing domestic value addition”, said Vinod Simon, president, AIRIA.
While considering the reduction in customs duty on natural rubber to 7.5 percent on a limited quantity till March-end and subsequently a cap of Rs 20 per kg, the government should have considered reduction in the customs duty on natural rubber latex as well.
The customs duty on latex has however remained unaltered. Thus, while natural rubber is attracting a duty of Rs 20 per kg, at current prices, the natural rubber latex is facing a duty of over Rs 100 per kg, he added.
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In a recent communication to the Ministry of Finance, AIRIA has said that a no-holds-barred increase in the prices of latex is threatening the survival of industry comprised largely of small scale units.
Natural Rubber latex is used in production of items like balloons, hot water bottles, feeding bottles, foam mattresses, medical and surgical articles including gloves and in some of the sports goods. As a large number of natural rubber latex units are small and medium enterprises (SME), they are unable to pass on the price increase to their consumers, it said.
The prices of latex have gone up from around Rs 55 a kg in January 2009 to Rs 117 at present, having peaked to Rs 148 recently. The government has all along considered natural rubber and natural rubber latex as co-existing products. Natural rubber latex is the first stage output of a rubber tree and is processed to obtain natural rubber.
AIRIA has asked for permission for immediate import of 5,000 tonnes of latex at zero rate of customs duty to cool off the current high prices. The industry body has also asked for fixing the minimum and maximum price of latex as has been done in case of several commodities. This will serve the interests of both the producers and consumers of latex.