Budget 2011: FIEO demands nil rate of customs duty on import of waste paper, wood pulp & coal
February, 10th 2011
FIEO has demanded nil rate of customs duty on import of waste paper, wood pulp & coal. Paper production in India is very low at 14% compared to 60% in developed countries. Therefore, paper industry in India depends on import of waste paper for manufacture of paper/paperboards.
Reuse of waste paper in paper manufacture encourages recycling and is an environment friendly practice. Besides, waste paper, virgin pulp is another important raw material for the paper industry. Certain type of pulps such as Softwood Chemical Pulp and Mechanical Pulp (Hardwood and Softwood) are not available in India due to non availability of raw material. Further, imported coal now attracts an effective Customs duty of 5.15%.
FIEO has also suggested that import duties on timber/logs in rough and processed forms be reduced to 0% and 5%.
FIEO cites that earlier the import duties on timber/logs in rough and processed forms were zero (0%) and five (5%) percent respectively. At present they are at 5% and 10% respectively. It has put additional cost burden on exporters of wood and wood products
Import duty worldwide at present is ranging between 2.5% and 5%. The growth of the Industry will accelerate and there would be more employment generation in the rural and remote areas if the import duty is brought down to zero percent for rough and unprocessed logs/timbers and 5% for the processed timbers and wood based products as they were prevailing in the yester-years. It results into considerable increase in their cost of production resulting their product became uncompetitive to sustain in the international market in comparison to other exporting countries.