CAPITAL GOODS FACE CUSTOMS WALL
It’s business as usual. The finance ministry has
not yet notified the reduction of import duty on capital goods imported against
EPCG licences from 5% to 3%, a major announcement in this year’s foreign trade
policy. As a result, manufacturing industries
are now not in a position to clear their capital goods imported against EPCG
licences either against 5% duty or against 3% duty. The customs authorities are
refusing to clear the goods at the reduced duty as the revenue department has
not issued the notification. Industry sources say imported goods are incurring
demurrage at the customs while the industry is losing financially and
technologically. For many export-oriented industries already hit by the rupee’s
rise against the dollar, this has come as an extra onus. The delay in
implementation of policies already announced is not the case with FTP alone.
This year’s budget announcement on reduction of central sales tax from 3% to 2%
from April 1, in line with the plan to introduced goods and services tax is yet
to be implemented. The notification has not been issued because of
disputes between the Central government and state governments on how to
structure the compensation package for states which will lose revenue due to
the CST rate cut. Implementation of the prime minister’s announcement
that Least Developed Countries would be given zero duty access for a large
number of goods they export (or can export) to