SME Times News Bureau | 17 Jan, 2020
In the upcoming Budget, the government may consider
a hike in customs duty on over 300 items like toys, furniture, footwear, coated
paper, rubber items among other, in a measure to help domestic Small and Medium
Enterprises (SMEs).
As a measure to boost domestic small and medium
industry, the government may consider a hike in customs duty on over 300 items
like toys, furniture, footwear, coated paper, rubber items among other in the
Union Budget.
Besides giving relief to the domestic industry and boosting employment, the
move to keep imports down and help to raise revenue. Many of these are
industries which are essentially concentrated in the small and medium sectors
and employment intensive.
The Commerce and Industry Ministry in its budget recommendations has proposed
rationalisation of basic customs on over 300 items across sectors including
furniture, chemicals, rubber, coated paper and paper boards.
On footwear and related products, the Ministry has suggested increase in duty
to 35 per cent from the current 25 per cent while for new pneumatic tyres of
rubber, it has proposed to hike customs duty to 40 per cent from the current
10-15 per cent.
The import duty hike on footwear is a move to thwart the increase in imports of
undervalued and cheap footwear. While the majority of imports are coming from
ASEAN countries, with which India has a free trade agreement, it is suspected
that China is re-routing large quantities of footwear through these countries.
The ministry has proposed to increase import duty on wooden furniture to 30 per
cent from the current 20 per cent. For coated paper, paper boards and hand made
papers, it has suggested doubling the duty to 20 per cent.
The Ministry has asked for the removal of import duty on waste paper and wood
pulp, which is currently at 10 per cent and 5 per cent, respectively. The paper
industry has expressed concerns about cheap imports and a surge in inbound
shipments.
For wood, metal and plastic toys, the ministry has suggested increase in import
duty to up to 100 per cent from the current 20 per cent. Import of these toys
increased to $304 million in 2018-19 from $281.82 million in 2017-18 from China
and Hong Kong.