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Saturday, July 14, 2001



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IEEMA seeks rationalisation of customs duty

Our Bureau


THE Indian Electrical and Electronics Manufacturers' Association (IEEMA) has urged the Government to rationalise the customs duty on metals.

Although the Government has already reiterated its total commitment to rationalisation of the indirect taxation structure, metals and down-stream metal products were not included in the rationalisation proposals in the Union Budget 2001.

``The existing duty structure is detrimental to the down-stream metal producers and also affects the entire engineering industry,'' said a statement issued here by IEEMA.

The customs duty on most of the finished products is lower at 25 per cent compared to the customs duty on base metals and metal products, which is prescribed as 35 per cent. The base metal producers can obtain their inputs such as ores and concentrates f rom the most economical indigenous or imported source, since the customs duty on all metals ores and concentrates have been prescribed at a uniform rate of five per cent.

IEEMA has urged the Government to continue the five per cent duty on concentrate and modify customs duty to 15 per cent on cathodes/rods, copper and ingots, plates, sheets, iron and steel lead, zinc.

It has also demanded the retaining the 25 per cent duty level on capital goods and products,including electrical and professional electronics products. This will simultaneously prepare the industry to an eventual three-tier duty structure with maximum le vel of custom duty pegged at 15 per cent from all industrial goods.

IEEMA has said the reduction in duty on cathodes and rods will not affect the indigenous primary copper producers as a study of the balance sheet revealed that even with the 10 per cent duty differential, they have a promotional advantage.

The association has urged the Finance Minister to include metals in the mid-term correction exercise initiated by the Government removing anomalies in customs duty on over 450 items. IEEMA has expressed the hope that the exercise will not be restricted t o changing duties on individual items.

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