121. I now turn to my proposals relating to customs duties.
122. In my previous budgets, I have reduced the total number of major
customs duty rates to four, that is, 35%, 25%, 15% and 5%. I do not wish to propose any
further reduction in the number of customs duty rates this year. However, I propose to
discontinue the surcharge of 10%. With this, peak level of customs duty will decline
marginally from 38.5% to 35%.
123. All agricultural produce already attracts the peak rate of duty of
35% or more. Current tariffs on major cereals are: Wheat (50%), Rice (70%/80%) and Maize
(50%). I now propose to increase the customs duty on tea, coffee, copra, and coconut and
desiccated coconut from the present 35% to 70%.
124. Similarly, I propose to increase the rate of duty on crude edible
oils ranging from 35% to 55% at present to a uniform rate of 75% and on refined oils from
45%/65% to 85%. A lower rate of 45% would apply to soyabean oil on account of WTO binding.
I also propose to enhance the rate of customs duty on the import of crude palm oil by vanaspati
manufacturers from 25% to 55% and restrict this concession to sick vanaspati units only.
The others will pay 75%. I wish to assure the House that in order to safeguard the
interest of our farmers we shall move swiftly whenever any perceptible threat on account
of imports is noticed.
125. The House is aware that Government has committed itself to abolish
customs duty on IT and telecom products and their inputs and components under the ITA 1
Schedule by 2003. The customs duty on these products is proposed to be reduced to 15% from
1, March 2001 from current levels.
126. Mr. Speaker, Sir, with the abolition of the remaining Quantitative
Restrictions in April this year second hand cars will also become freely importable. To
allay the fears of surge in import of second hand cars, the rate of basic customs duty on
their import will be raised to 105%, which is three times the peak rate. The total duty
now applicable to second hand cars will be more than 180%. I propose a similar structure
of duty for the import of old multi utility vehicles, scooters and motor cycles.
127. In order to provide a level playing field for domestic liquor
producers, I propose to levy CVD at a suitable rate on imported liquor, taking into
account the levies of state excise on domestic production.
128. Our textile industry has to modernize itself and acquire the latest
technology in order to face global competition and attain high quality of production. I
propose to reduce the basic customs duty on specified textile machines, including
shuttle-less looms, from 15% to 5%. As a measure of further relief to the textile sector,
I propose, to reduce the customs duty on silk waste, cotton waste and flax fibre from 35%
/25% to 15%.
129. There are some cases of anomaly in customs duty between raw materials and
intermediate goods on the one hand, and intermediate goods and final products on the
other. DMT, PTA, MEG and Caprolactum are raw materials for production of man-made fibers
and yarns. However, the customs duty on these materials is higher than the rate applicable
to fibers and yarn. I propose to reduce the customs duty on DMT, PTA, MEG and Caprolactum
from 25% to 20%, which is the WTO bound rate for synthetic fibers and yarns. Similarly,
soda ash is an input for the production of glassware, detergents etc. and currently
attracts the peak customs duty of 35% along with the final products. I propose to reduce
it to 20%. I also propose to reduce the customs duty on polyester chips and nylon chips
for the manufacture of fibers and yarns from 35% to 25%.
130. On the same analogy, the customs duty on high quality DBM, seawater magnesia
and fused magnesia is being reduced from 25% to 15%.
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