DAIKIN

Tariff Hike To Bring Rs 2500 Crore More To Central Kitty

The center is expected to raise about Rs 2500 crore in fiscal 2019 from the tariff increase on 19 items, senior finance ministry officials said.
But a back-of-the-envelop calculation by indirect tax experts suggests that the indirect tax kitty may swell by up to Rs 5000 crore in the next 6 months of the current financial year provided the consumption remains the same and people do not go for import substitution.
However, the measure is unlikely to spur the Make in India initiative of the center in the near to medium term as most of the items such as refrigerators and air conditioners that have attracted a 100 percent increase in import duty are meant mostly for industrial use or the super-rich. These are neither produced in India nor there any immediate proposal to manufacture them in the country.
For example, refrigerators and air conditioners under a particular code on which the duty has been hiked are all imported and in the past 3 years their imports have increased, especially from China.
“The duty hike list has been prepared carefully so as to maximize government revenues without hurting the common man,” an official said on the condition of anonymity. The government has maintained that the duty hike has been done only to maintain trade balance. The total value of imports of these items in the year 2017-18 was about Rs 86,000 crore.
India’s trade deficit or gap between exports and imports so far this fiscal has topped USD 45 billion and according to the Reserve Bank of India that was one of the major reasons for decline in the rupee.
The customs duty hike on gold and silver jewelry and precious stone comes in the wake of a whopping 60 percent rise in their imports which have valued more than USD 2.5 billion in a single month.
However, gold has been spared from a customs duty hike as it only increases smuggling, the official said. Gold currently attracts a 10 percent import duty.― Deccan Herald

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