The central government is preparing to promote domestic manufacturing in the country. Keeping this in mind, the government may consider finding a solution to the issue of inverted duty structure on products like paper, furniture, washing machines, solar glass and air purifiers i.e. imposing higher tax on raw materials than finished products. According to language news, officials have given this information on Wednesday. Higher duties on raw materials than finished products increase debt and costs for manufacturers.
Share a list of products with the Ministry of Finance
According to the news, the official said that the Ministry of Commerce and Industry has shared a list of products with the Finance Ministry to look into the issues of this duty structure. This list has been shared after detailed discussions with industry chambers and export promotion councils. The official said that we have already sent the list to the Finance Ministry. The list includes paper, furniture, washing machines, solar glass and air purifiers. There are also some cases of apparel and jewellery.
Expensive raw materials make products expensive
The system of imposing higher duty on raw materials than on finished products affects the domestic industry. In this situation, manufacturers have to pay more for raw materials in terms of duty, while the finished product attracts less duty and cost. Expensive raw materials make products expensive and they become less competitive in the export market.
There is a danger of import of such products becoming cheaper in the domestic market. Settlement of this duty structure will help in enhancing the competitiveness of domestic exporters. It is being said that this will help in increasing exports and promoting manufacturing.
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