Aluminium, copper, steel, some chemicals, plastics and certain consumption goods are in focus.
The upcoming budget could see another rejig of basic customs duties on select products as the government attempts to push local manufacturing. The commerce and revenue departments are in discussions on the matter and will take a final call closer to the budget, which is likely to be presented on February 1.
Metals including aluminium, copper and steel, select chemicals and plastics are some areas in focus, as are certain consumption goods.
“There have been discussions,” said a government official privy to deliberations on the matter.
There is gap between bound rates and effective rates, an official said, pointing to the scope for increasing tariffs. A bound tariff rate is the maximum allowed by the WTO to any member state for imports from another member state.
The commerce department has said the domestic industry faces a “significant handicap” vis-à-vis imported goods on account of certain internal taxes for which there is no equalising imposition on imported goods, unlike the goods and services tax that places local and overseas goods on an equal footing
No credits are available for these internal taxes, which are levied on finished products or on the inputs used in their manufacture. These taxes include electricity duty, duties on petroleum, clean energy cess, mandi tax and biodiversity fees.
“Such levies result in increase in cost of production, making the domestic products less competitive or on unequal footing,” the commerce department told the revenue department.
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