NEW DELHI: The coronavirus pandemic has disrupted global supply chains to a large extent due to continued shutdowns and restrictions across borders.
To ease the situation, the Indian government has taken many proactive measures to help the industry. These include faceless valuation, online submission of documents, and importing goods without payment of manufacturing duties and other operations in warehouses.
The Center had also reduced tax rates, deferred payment of taxes, waived penalties and late fees, and extended compliance deadlines.
In its pre-budget memorandum, the Confederation of Indian Industry (CII) pointed out that industry, especially exporters, find it globally uncompetitive due to the withdrawal of export incentives like the MEIS.
“Although the rates under the Commodity Export Duties and Taxes Remission Program (RoDTEP) have been announced, manufacturers/exporters do not find the rates to match the taxes and duties incorporated into the products of export,” he said.
Therefore, CII proposed a set of general principles to guide the tariff structure as well as a roadmap to encourage and calibrate domestic manufacturing in alignment with global trade trends that would build its capabilities and boost export competitiveness.
Reduction of customs duties:
The industry recommends the reduction of customs duties on various products.
For coking coal, limestone, naphtha, copper concentrate, ethane, anthracite, he suggested reducing tariffs to zero from the current 2.5%.
Similarly, for goods imported for oil operations under a certificate of essentiality, the CII has recommended eliminating customs duties from the current 5%.
He also suggested reducing import duties on optical fibers from 15% to 0% and from 20% to 0% on telecommunications network products and base station antennas.
Some other recommendations made by CII include:
* Exempt clearing tax on import of goods by SEZ unit/developer for authorized operations
• Exemption from customs duties on all items purchased by R&D based on appropriate certification by the R&D manager
* Import duty exemption on crude palm oil (currently 35%), palm fatty acid distillate (currently 5%) and lauric acid (currently 7.5%) under actual conditions ‘use
* The exemption available for shipbuilding will be extended unconditionally to make it easier to conduct business
* Import duty exemption on ferrous and stainless steel scrap will be extended for one year until March 2023
* Increase in duty free baggage allowance from Rs 50,000 to Rs 1,00,000 subject to purchase from duty free shop in India
* Increase alcohol allowance from 2 liters (current) to 4 liters per person conditional on purchase from duty free shop in India
* Postpone the imposition of the basic customs duty on solar cells and modules for 6 months
* Exclude SEZs for imposition of Anti-Dumping Duty (ADD) and Countervailing Duty (CVD) when no capacity is available in India
* The current 90-day period should be extended to one year for the return of goods to the export-oriented unit by the subcontractor/worker as it is not adequate.
* The condition of giving notice and taking samples may be relaxed, in particular in the case of chemical/pharmaceutical activities.
* Extend the 90-day interest-free period for exchanged goods necessary for operational or business purposes
* Simplify the administration of rules of origin within the framework of a trade agreement
* Customs refund arrangements should be automated, online and faceless
* Introduce a central sales tax amnesty regime