Finance Minister Yashwant Sinha has sought to raise the customs duty on somemore agricultural products as well as second-hand passenger cars with a viewto protect the farmers and the domestic automobile industry from thefall-out of removal of quantitative restrictions from April 1. However, thebenefit this protection is unlikely to be positive as he has simultaneouslyplans to abolish the 10 per cent surcharge on customs duties.Imports of second-hand cars will attract a total customs duty of more than180 per cent, including the basic duty of 105 per cent, while those ofmulti-utility vehicles, scooters and motor cycles will also be subject to asimilar duty structure. In case of other imported consumer products, theFinance Bill '01-02 has made an enabling provision for chargingcountervailing duty on the basis of the maximum retail price. The newagricultural products on which customs duties have been sought to be raisedfrom 35 per cent to 70 per cent are tea, coffee, copra and coconut anddesiccated coconut. Duty on wheat and maize have been raised to 50 per centand that of rice to 70-80 per cent.
The Budget also proposes to increase the duty on crude edible oils from 35to 55 per cent to a uniform rate of 75 per cent and on refined oils from45/65 per cent to 85 per cent. A lower rate of 45 per cent would apply tosoyabean oil on account of WTO binding. The duty on crude palm oil importedby vanaspati units is also proposed to be increased from 25 to 55 per cent,restricting this concession to sick units only. Other vanaspati units willpay 75 per cent duty.
While seeking to raise the duty, the finance minister assured that theinterest of the farmers would be safeguarded and stated that "we shall moveswiftly whenever any perceptible threat on account of imports is noticed".
The customs duty on information technology and telecom products and theirinputs and components under IT Agreement Schedule I is proposed to bereduced to 15 per cent from March 1.
To provide a level-laying field for domestic liquor manufacturers, it isproposed to levy countervailing duty at a suitable rate on imported onestaking into account levies of state excise on domestic production. Toencourage modernisation of the textile industry, Mr Sinha proposed to reducethe basic customs duty on specified textile machines, including shuttle-lesslooms from 15 to 5 per cent. As provide further relief to this sector, theminister proposed to lower the customs duty on silk waste, cotton waste andflax fibre from 35 per cent/25 per cent to 15 per cent.
There are some cases of anomaly in customs duty between raw materials andintermediate goods on the one hand and intermediate goods and final productson the other. To remove the anomaly, the Budget proposed to reduce thecustoms duty on DMT, PTA, MEG and captrolactum - all of which are rawmaterials - from 25 to 20 per cent which is the WTO-bound rate for syntheticfibres and yarns. Similarly, soda ash is an input for production ofglassware, detergents etc and attracts the peak customised duty rate of 35per cent along with the final products.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
