Tyre cos demand fixed customs duty on rubber

News posted by www.newsinfoline.com

Kochi, July 7 (PTI) The Indian tyre industry has asked the government to impose customs duty on natural rubber on a fixed basis, rather than ad valorem, on account of soaring prices of the commodity. Under the current applicable ad valorem rate of duty, when natural rubber (NR) prices move up, consumers not only have to pay more to import NR, but also have to bear the burden of customs duty, which goes up proportionately, Automotive Tyre Manufacturers Association (ATMA) Director General Rajiv Budhraja told reporters here. "In the event of NR prices going above a certain level, that is about Rs 90 per kg, customs duty on NR should be on a fixed basis," Budhraja said. When the NR price was Rs 75 per kg, the 20 per cent customs duty worked out to Rs 15 per kg and when the price was increased to Rs 180 per kg, the same rate of duty (i.e. 20 per cent) worked out to Rs 36 per kg, he said. Such a change in tariff rates was recently introduced in China to make the domestic tyre and rubber-producing interests more competitive and viable, he said. Currently, the import duty on sheet rubber in China is 20 per cent, or 1.6 yuan per kg, whichever is less. Since NR prices are currently hovering at around 23.10 yuan per kg, the customs duty on rubber sheet imports is less than 7 per cent, he said. Budhraja said the industry has also sought duty-free import of two lakh tonnes of NR on a priority basis to "cool off" rising NR prices as well as cut down the production-consumption deficit, which has been projected at 1.76 lakh tonnes in 2010 by the industry. This is much higher than the Rubber Board''s estimates of a production-consumption deficit of 85,000 tonnes. The board had said there will a 75,000 tonne increase in production, but the industry feels this is an over-estimation, given that an increase of this order has never been achieved in 20 years. The industry has also pegged consumption growth at about 12-15 per cent, whereas the board''s estimation is 5-6 per cent, he said. NR prices have touched an all-time high of Rs 180 per kg, an 80 per cent increase over the average June, 2009, price of Rs 100 per kg. The industry feels ''let down'' at the absence of corrective steps by government, Budhraja said. Not even symbolic action has been taken so far by the government, he added. .

News posted by www.newsinfoline.com

Click here to read more news from www.newsinfoline.com
Please follow our blogs

newsinfolinephotogallery
prabugallery
newsinfolinephotogallery1

photogallery1