Govt may consider addressing inverted duty structure for certain aluminium goods in Budget

The government is likely to consider addressing the issue of inverted duty structure for certain products in sectors like aluminium in the forthcoming Budget to boost domestic manufacturing, an official said. Inverted duty structure refers to taxation of inputs at higher rates than finished products that result in the build-up of credits and cascading costs.

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The industry has shared a list of products. An industry official said they want a cut in import duty of raw material for the aluminium sector. They are also seeking an increase in the duty on final products. According to the proposal, the industry is seeking a cut in the duty on calcined petroleum coke (from 7.5 per cent to 2.5 per cent); raw petroleum coke (from 10 per cent to 2.5 per cent) and aluminium fluroide (7.5 per cent to 2.5 per cent).

They are also suggesting increase in duty on aluminium finished products to 12.5 per cent from the current 7.5 per cent. Inverted duty structure impacts the domestic industry as manufacturers have to pay a higher price for raw materials in terms of duty, while the finished products land at lower duty and cost.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget in February next year.

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