AC industry seeks duty cut

Refrigeration and Air Conditioning Manufacturers' Association (RAMA) has submitted a pre-budget memorandum to the finance ministry seeking reduction on import and excise duty on the cold chain equipments.

RAMA has suggested the ministry to reduce the import duty from 12 per cent to 6 per cent and excise duty from 16 per cent to 8 per cent to promote usage of the equipment.

The organised retail sector led by super markets and the government's policies on contract farming is expected to boost demand for cold chain equipment in India

T G S Babu, president, RAMA told Business Standard, "The Indian market is witnessing a growing demand for the cold chain equipments. Although, most of the stores require large warehouses for refrigeration a very few, especially in the agricultural sector, are using the cold chain equipment as they are costly and the cost of refrigeration per tonne is high in the country."

He added, "A lot of the cold chain equipment in India are imported from Europe. The currency euro is gaining against the Indian rupee. The reduction in import duties will make the equipment cost friendly, encouraging people to refrigerate and minimise food wastage."

RAMA has also recommended the finance ministry to rationalise the service tax and withdraw restrictions on input service tax credit and correction of inverted duty structure in respect of India-Thailand FTA. It has sought to reduce the deemed labour services component in air conditioning and refrigeration turn key contracts from 33 per cent to 15 per cent and fix the labour component in maintenance contract at 70 per cent.