- May 21, 2022
- Posted by: admin
- Category: Daily News
- India announced a series of changes to the tax structure levied on crucial commodities in a bid to insulate consumers from rising prices amid high inflation.
- Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol by INR8 per litre, and INR6 per litre on diesel.
- The new tax regime on petrol and diesel could result in a loss of about INR1tr Indian rupees to the government in annual revenue due to the lower collection, she said in a series of tweets.
- The latest measures will be effective from 22 May 22, the government said in a notification after the announcement by Sitharaman, who also urged state governments to follow suit with similar reductions on fuel prices keeping in line with federal plans.
- A litre of petrol currently costs INR105.41, while diesel is at INR96.67 in New Delhi.
- The government will also provide a fresh subsidy of INR200 per cooking gas cylinder to over 90 million beneficiaries under a welfare scheme introduced for women below the poverty line.
- On agriculture, the government will provide an additional fertiliser subsidy of INR1.1tr to further cushion farmers from the price rise, bringing the total fertiliser subsidy to INR2.15tr in FY23.
- The subsidy will have an annual revenue implication of nearly INR61bn, Sitharaman said. “Prime Minister Narendra Modi has specifically asked all arms of the government to work with sensitivity and give relief to the common man,” she said.
- The government was also working to reduce taxes on raw materials for plastic products to lower down the cost of final products.
- Specifically, the government waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices.
- Also, to increase domestic availability, the duty on exports of iron ore has been hiked up to 50% from 30%, and a few steel intermediaries to 15%, according to a notification.
- Besides, the duty on import of raw materials used in the plastic industry has also been reduced to lower the cost of domestic manufacturing. While import duty on naptha has been cut to 1%, from 2.5%, the duty on propylene Oxide has been halved to 2.5%.
- The import duty on Polymers of Vinyl Chloride (PVC) has been cut to 7.5%, from 10%, currently. Announcing the customs duty cut on plastic, Sitharaman said the levies are being cut on raw materials and intermediaries where the import dependence is high. “This will result in reduction of cost of final products,” she tweeted.
- Experts said the latest moves will likely increase fiscal concerns and raise doubts about government meeting its deficit target of 6.4% of GDP for 2022-23.
External Link : https://economictimes.indiatimes.com/news/economy/policy/govt-waives-import-duty-on-some-raw-materials-for-steel-industry-export-duty-on-iron-ore-hiked-up-to-50/articleshow/91714314.cms