New Delhi: The government may propose easing procedural hurdles, rectifying tax anomalies, and recalibrating customs duties in the upcoming Union Budget to bolster domestic industries, according to sources familiar with the matter.
New Delhi: The government may propose easing procedural hurdles, rectifying tax anomalies, and recalibrating customs duties in the upcoming Union Budget to bolster domestic industries, according to sources familiar with the matter.
The finance ministry plans to remove irritants for merchants claiming tax refunds and tweak tariffs to make investments in critical sectors more viable, and correct inverted duty structures in textiles, apparels, and engineering goods, one of the two persons quoted above said.
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The finance ministry plans to remove irritants for merchants claiming tax refunds and tweak tariffs to make investments in critical sectors more viable, and correct inverted duty structures in textiles, apparels, and engineering goods, one of the two persons quoted above said.
A periodic review of import duty exemptions is also underway, with only those items that benefit the domestic economy likely to be retained.
Customs duty changes are expected for items related to two key sectors—consumer electronic goods and medical devices—to boost component production in these sectors, the second person quoted above said.
Policymakers aim to broaden and deepen domestic production, reduce import dependence, and encourage value addition in segments predominantly involving assembling imported components.
“For these sectors, the know-how is not under patent protection, and all it may require to attract fresh investments is a little tariff support,” said the person who spoke on condition of anonymity. “A price arbitrage of 5% between imports and local production on account of import duty, ocean freight and insurance can be a big incentive for local production.”
The plan is to encourage more value addition in segments where local production is predominantly in the nature of assembling imported components, the person said.
Ease of doing business
Improving ease of doing business and cutting red tape in claiming tax refunds are also high on the government’s priority. Experts said that an amnesty scheme under customs is the need of the hour.
“This would go a long way in resolving legacy litigation and in fostering certainty in doing business. Separately, rate rationalization for certain products is also being looked forward to,…
Read More: Budget 2024: Govt plans duty reforms, tax tweaks to boost local manufacturing