Big Changes planned to be made in Customs Duty and GST

A senior official revealed that the government is looking into products where an inverted duty structure on raw materials is causing problems for local businesses. They’ve started working on fixing this issue.

Products like washing machines, air purifiers, solar glass, paper, furniture, apparel, and jewellery are on their radar.  Some of these products have been highlighted as receiving special attention as part of the Make in India project.

When taxes on raw materials are higher than those on finished products, it’s called an inverted duty structure. This makes imports cheaper than local production, which hurts Indian industries.

The Ministry of Commerce and Industry shared this list with the Finance Ministry after talking to industry groups and export promotion councils.

For example, in the paper industry, the tax on raw pulp is 12%, but on finished paper, it is only 5%. So, more finished paper gets imported.

Similarly, washing machines and air purifiers have high import taxes, making local manufacturing less attractive. Solar glass is facing dumping from China and Vietnam.

Some suggestions were made earlier to fix this, and they might come up again when the full budget is presented by the new government.