Assocham for import, customs duty cut

New Delhi, Nov 26 (UNI) Industry chamber Assocham has sought an import duty cut on all capital goods equipment and reduction in customs tariff on all goods used for telecom equipment manufacture to zero per cent from the present 12.50 per cent.

In its pre-budget memorandum submitted to the government, the chamber has sought customs tariff reduction on raw material, inputs, components require to manufacture electronic items including telecom equipment to zero per cent.

It has emphasised that in view of the fact that a number of FDI proposals are being materialised in the near future, there is a need to create a level playing field for the indigenous products to compete with the imports.

The sub-assemblies is to be treated at par with finished products to promote Electronic Manufacturing Services (EMS), the chamber said.

''All the inputs to the components industry should attract zero custom duty so as to enable domestic components industry to compete with the imports,'' Assocham President Anil K Agarwal said.

The chamber has also recommended reduction in excise duty rate from 16 per cent to 14 per cent in Budget 2007-08 and at a later stage to 12 per cent level.

The 2 per cent reduction in excise with consequential lower incidence of state and local taxes will have 3 to 5 per cent reduction in prices. This in turn will increase the demand for manufactured goods leading to higher industrial growth.

In addition, the government should also consider withdrawal of tax exemptions currently extended to a large number of products and retain only for bare minimum items like infrastructure goods and process foods, the chamber added.

The replacement of multiple taxes by goods and services tax (GST) will increase the tax-GDP ratio by 2 per cent, and improve the competitiveness of Indian industry by eliminating the cascading effect of taxes on production cost, it said.

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