Govt to lose Rs 3,000 cr from customs duty cut
The govt's decision to cut customs duty on 11 product categories will result in a revenue loss of Rs 3,000 cr.
By PTI |
NEW DELHI: The government's decision to cut customs duty on 11 product categories to check inflation is likely to result in a revenue loss of about Rs 3,000 crore, even as the industry cautioned against its adverse impact on the domestic manufacturing sector.
"We were planning to do this anyway on February 28...We decided to advance it because it has the potential to check inflation, especially in the manufacturing sector," Finance Minister P Chidambaram told reporters here on Tuesday.
Official sources said Finance Ministry has projected that while the decision to bring down customs duty may dampen rising prices in certain manufacturing sectors, it will also result in a revenue loss of Rs 3,000 crore.
The government last night abolished import duty on portland cement from 12.5 per cent. It also reduced the import duties on primary and semi-finished metals such as aluminium and copper and certain specified capital goods.
Meanwhile, industry bodies have largely welcomed the government's move to reduce customs duty on a host of items, saying it would give a fillip to large projects in manufacturing and check rising prices.
However, Ficci cautioned in case of commodities that are produced domestically as final products, a sharp and sudden cut in customs duty could adversely impact competitiveness of domestic companies engaged in production of such items.
"We were planning to do this anyway on February 28...We decided to advance it because it has the potential to check inflation, especially in the manufacturing sector," Finance Minister P Chidambaram told reporters here on Tuesday.
Official sources said Finance Ministry has projected that while the decision to bring down customs duty may dampen rising prices in certain manufacturing sectors, it will also result in a revenue loss of Rs 3,000 crore.
The government last night abolished import duty on portland cement from 12.5 per cent. It also reduced the import duties on primary and semi-finished metals such as aluminium and copper and certain specified capital goods.
Meanwhile, industry bodies have largely welcomed the government's move to reduce customs duty on a host of items, saying it would give a fillip to large projects in manufacturing and check rising prices.
However, Ficci cautioned in case of commodities that are produced domestically as final products, a sharp and sudden cut in customs duty could adversely impact competitiveness of domestic companies engaged in production of such items.
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