 "Budget 2024: ICC calls for changes in custom duty to boost manufacturing")
Ahead of Budget 2024, scheduled for presentation in the Lok Sabha on July 23, reports indicate that the Indian Chamber of Commerce (ICC) has recommended that the government streamline customs duties across sectors such as steel, solar batteries, aluminium, and lithium cells to enhance domestic manufacturing.
Ameya Prabhu, ICC president, emphasised the necessity of protective measures to foster growth in domestic industries including steel, solar batteries, aluminium, and lithium cells.
"There is a need for the rationalisation of customs duty in these specific sectors in a holistic manner. There is huge potential to boost domestic manufacturing and make India a global hub for manufacturing," said Prabhu.
He added that tariffs on raw materials disproportionately affect local businesses, especially downstream firms. He also suggested considering a revision of the inverted duty structure, proposing a reduction in the duty on mixed petroleum gas from 5 per cent to 2.5 per cent.
"To boost domestic manufacturing, there is a need to increase duty on polymers - polyvinyl chloride, polyethylene terephthalate, polypropylene and polyesters to 10 per cent. This will help in reducing import dependency and driving India towards self-sufficiency in the petrochemical manufacturing segment," Prabhu said.
Addressing the critical role of the aluminium foil sector, Prabhu mentioned significant challenges faced by domestic industries due to anti-dumping duties on raw materials, while finished goods imported from China enjoy duty-free status. "This dual effect has resulted in extensive net losses to the companies that have made significant investments in this industry," Prabhu said.
Budget 2024: Proposing regulatory review
The chamber proposed establishing a commission to comprehensively review the Income Tax Act of 1961 and streamline its provisions regarding taxation.
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In a statement, the chamber highlighted that the Act is quite dated, and annual amendments introduced in the Budget have rendered it increasingly complex to comprehend. These changes have led to numerous inconsistencies, thereby generating a significant volume of legal disputes, he added.
The ICC president suggested that the Centre should consider not imposing tax on dividends.
He mentioned that under his leadership, the ICC has expanded its influence both domestically and globally, establishing itself as a premier global chamber. "We have opened 25 chapters globally in countries including New Zealand, the US, Europe, Australia, Korea, and Middle Eastern nations," he said.
(With agency inputs)