The domestic capital goods producers have sought a level playing field vis--vis imports on the matter of the special additional duty of customs (SAD) levied in lieu of sales tax. They have now suggested to the Finance Minister, Mr P Chidambaram, that SAD be made non-modvatable like in the case of sales tax/value added tax (VAT).
While SAD levied in lieu of sales tax is modvatable against excise duty, the sales tax/VAT that domestic producers of capital goods pay is not.
The domestic companies are at a disadvantage vis--vis imports. This will have to be addressed. Otherwise it is unfair to domestic production, Mr A.M. Naik, Chairman of Larsen & Toubro (L&T) told reporters after meeting Mr Chidambaram on Tuesday.
The meeting assumes significance as it comes in the backdrop of some slowdown in industrial output, especially in capital goods sector and automobiles.
Mr Naik also suggested to the Government that there should be a 35-per cent anti-dumping duty across the board on Chinese imports until they float their currency.
It is competition among unequals. Normally, everywhere around the world the domestic industry is protected. But here., he said.
Besides the capital goods industry, the Finance Minister also met automobile sector representatives. Sources said that the issue of tightening of bank credit to customers had come up for discussion.