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: cpt :: due date for vat payment :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS :: TDS :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: list of goods taxed at 4% :: VAT Audit
 
 
« Indirect Tax »
 Indirect tax receipts to see small, brief hit’
 There is no tax on interest income of up to Rs3 lakh a year for senior citizens
 Chidambaram favours change in direct tax rates
  Further rationalization of revised simplified procedure for fixation of brand rates
 Kerala to accept demonetised banknotes for payment of state tax till Nov 24
 Centre-state gridlock over GST jurisdiction remains, could threaten tax rollout
 India to levy tax on investments from Cyprus from April 2017
 Why tax radar may detect your cash deposits after Nov 8
 Income tax notices to religious, charitable trusts
 ICAI starts course on accounting technicians
 More trouble ahead as Tata Trusts get I-T summons for tax avoidance

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