The decision was been taken on the basis of the outcome of a meeting of a group of members of Parliament held in the finance ministry on October 10. It was concluded at the meeting that given the behaviour of global prices, there was a need to protect the domestic manufacturers.
The MPs also decided that the level of protection would be fixed by the finance ministry and that this protection would be based on triggered prices with a sun-setting clause to indicate that the import duty will be withdrawn if the prices exceeded the threshold point.
Briefing the media, revenue secretary N K Singh said the industry ministry had actually recommended the imposition of 20 per cent customs duty, but the finance ministry had decided that 10 per cent was reasonable.
Singh said the government was of the view that a 10 per cent duty on imported newsprint should be imposed when the c.i.f. value fell below $575 per tonne.
At that price, the cum-duty price is about Rs 22,000 per tonne, the same as the average domestic cost of production.
When the c.i.f. crosses the $575 per tonne limit, there should be a reconsideration of the duty, Singh said.
The international prices of newsprint have generally been falling, from peak prices of $1,000 per tonne in 1995 to about $450-500 per tonne in September 1996.
The government has decided to monitor carefully the developments and behaviour of international prices and will hold periodic consultations with the parliamentarians for taking necessary action.
