Union Budget 2024 | Govt should rationalise customs duty in Budget to boost domestic mfg: Indian Chamber of Commerce

New Delhi: The Indian Chamber of Commerce (ICC) has suggested the government to rationalise customs duties in various sectors including steel, solar battery, aluminum, and lithium cells in a bid to boost domestic manufacturing.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget for financial year 2024-25 on July 23.

ICC President Ameya Prabhu said protective measures are needed for the growth of domestic industry in sectors including steel, solar battery, aluminum, and lithium cells.

"There is a need for rationalization of customs duty in these specific sectors in a holistic manner. Huge potential is there to boost domestic manufacturing and make India a global hub for manufacturing," Prabhu said.

He added that levies on raw materials impact domestic players particularly the downstream firms.

He also asked for correction in inverted duty structure by cutting down duty on mixed petroleum gas from 5 per cent to 2.5 per cent.

"To boost domestic manufacturing, there is a need to increase duty on polymers - polyvinyl chloride, polyethylene terephthalate, polypropylene and polyesters to 10 per cent. This will help in reducing import dependency and will drive India towards self-sufficiency in the petrochemical manufacturing segment," Prabhu said.

Talking about the importance of the aluminium foil sector, the President said the domestic industry has been facing severe losses as there is anti-dumping duty on raw materials whereas the finished goods are not subject to any duties on imports from China.

"This dual effect has resulted in extensive net losses to the companies that have made significant investments into this industry," Prabhu noted.

On the taxation side, the chamber has suggested setting up a commission to review the Income Tax Act 1961 in its entirety and simplify the provisions.

"This is an old Act. Every year in the Budget, amendments are made which has made this Act complex to understand. These amendments have resulted in many anomalies which in turn have given rise to a large number of legal cases," the chamber has said.

Prabhu further recommended the government not to impose tax on dividends.

He added that during his tenure so far the ICC has spread its wings further nationally and internationally and become a truly world-class chamber. "We have opened 25 chapters globally in countries including New Zealand, the US, Europe, Australia, Korea and Middle East nations," he said.