Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARDS :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: VAT RATES :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: cpt :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
« Indirect Tax »
 Applicability of TDS provisions of section 194-I of the Income-tax Act, 1961 on lump sum lease premium paid for acquisition of long term lease-regarding
 CBDT seeks monthly data of disposed I-T appeals
 Further indirect tax may be levied in 2017
 India has to make its own tax law
 Centre warns against criticism of GST network
 Indirect tax collection jumps 26% in April-September, direct tax 9%
 Indirect Tax collections up
 Thank you note from income tax department
 Tax dept scanning IDS disclosures filed through post
 Poor management cause of financial pressure on Centre
 GST to have short-lived impact on inflation: RBI

Budget likely to remove indirect tax anomalies for boost to Make in India
January, 22nd 2015

Finance Minister Arun Jaitley’s full-fledged Budget is likely to propose a fresh round of indirect tax reforms by removing existing anomalies such as the inverted duty structure. This is being done to boost Prime Minister Narendra Modi’s ‘Make in India’ programme.

Power generation machines, telecom equipment, and petroleum products are among the categories affected by the inverted duty structure.

However, a Finance Ministry official admitted that given the tax revenue situation, it would be challenging to remove the inverted duty structure for more sectors. In the last Budget, despite limited fiscal space, Jaitley addressed the problem of inverted duty structure in certain sectors. Expectations are that he will continue to do the same this time also.

Inverted duty structure refers to higher import duty on raw materials or intermediate goods and lower duty on finished products. This discourages domestic value addition. This inversion is not solely because of basic customs duty, but in some cases a result of other additional duties.

“Areas such as power generation machines are still facing issues of inverted duty structure, making them uncompetitive. Consultations have started to remove this to boost manufacturing,” a senior Government official told BusinessLine.

For example, a component mainly imported and widely used in power generation machines has basic import duty of 30 per cent, while for finished machines it is 5 per cent.

“Now if duty is lowered to even 10 per cent, this will translate into savings of 3-5 per cent. This will help domestic companies, as they work on thin margins of up to 5 per cent,” he said.

Similarly, finished telecom equipment and petroleum products attract lower duty than components and feed stocks, respectively.

These are among the 25 sectors identified in the ‘Make in India’ mission which was launched last year to boost domestic manufacturing.

Inverted duty structure results from many factors including free trade agreements with various countries. Though such arrangements provide an opportunity for Indian manufacturers to export more, higher import duty on raw materials is disadvantageous to domestic manufacturers.

In its 2013 survey, the industry body FICCI had identified 13 sectors facing the brunt of an inverted duty structure. These included aluminium, capital goods, cement, chemicals, electronics, paper, steel, textiles and tyres.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions