Budget 2023: The government should not make any changes in custom duty for at least five years to promote domestic manufacturing. Economic research institute GTRI has said this in its pre-budget suggestions.
The government should not make any changes in custom duty for at least five years to promote domestic manufacturing. Economic research institute Global Trade Research Initiative (GTRI) said this in pre-budget suggestions on Wednesday.
GTRI also said import duty on components should be continued, reverse duty issues should be resolved and customs duty slabs should be reduced from the current 25 to five to avoid legal complications and confusion. It said that these suggestions will prepare India to deal with the challenging global economic environment.
The institute said that countries around the world have become ready to deal with the difficult global conditions and in view of this, India should announce no change in (import) duty for five years. “Any change may prove to be adverse for the production linked incentive scheme (PLI), phased manufacturing program and manufacturing initiatives,” it said. The government should take steps like reducing import duty only when the economic scenario is clear.
GTRI said that all electronic and complex engineering equipment has thousands of components and India can become a true manufacturer only if the components are also manufactured here. “But if there is zero duty on components, they will be imported and will result in just assembling final production in India,” he said. Most of the companies doing this work disappear after the incentives end.”
The institute said that there are more than 26 slabs of customs duty in India ranging from zero to 150 percent, which gives rise to disputes and legal issues. She said the government should reduce the tax slabs to five in Budget 2023-24.
