This story is from December 23, 2006

India Inc to push for lower customs duty

Byas Anand / TNN / Dec 23, 2006, 01:24 IST

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A more aggressive and confident India Inc is expected to build up a case for reducing peak customs duty.

India Inc to push for lower customs duty

NEW DELHI: A more aggressive and confident India Inc is expected to build up a case for reducing peak customs duty across sectors and allowing greater international competition in its first pre-Budget interaction with finance minister P Chidambaram on January 9.
While seeking a cut in peak import duties, the top business leaders and representatives of chambers are also expected to urge government to maintain basic customs duties at the current level of around 12.5%."But the industry wants greater global competition and so may seek a cut in peak duties that range anywhere between 100% and 240%," a source close to the development said.
This, analysts said, would be a clear sign of a maturing Corporate India, which has in recent years turned aggressive and even grown an appetite for buying global biggies. Statistics reveal that in the first three quarters of this year alone, Indian companies announced 115 foreign acquisitions, with a total value of $7.4 billion. And if we add that tally Tata's bid to buy Corus, the shopping cart would grow by another $10-billion. Corporate India is also expected to ask government to maintain the Service Tax at the present rate of 12%. Besides, it may also suggest bringing in more services under the tax net in order to increase the revenue from service tax.
Alongside, the industry is expected to seek a reduction in excise duty too to make themselves more competitive in the domestic market besides creating a level playing field. The industry chambers have sought a reduction in excise duty for a host of products like cars, two-wheelers, processed foods, pesticides and electric fans. At present most manufactured products attract 16% excise duty and 12.5% VAT. CII has urged government to implement its proposal of bringing down CST rate from 4% to 2% from April 1, 2007, and announce a roadmap for further reduction of CST to Nil.

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