ICC Pushes for Rationalisation of Customs Duties Ahead of Union Budget 2024-25

The Indian Chamber of Commerce (ICC) has recommended the rationalisation of customs duties on steel, solar batteries, aluminum, and lithium cells to boost domestic manufacturing. ICC President Ameya Prabhu highlighted the adverse impact of levies on raw materials and suggested increasing duties on polymers to promote self-sufficiency. The ICC also called for a review of the Income Tax Act 1961 and the removal of tax on dividends.

The Indian Chamber of Commerce (ICC) has proposed that the government rationalise customs duties across various sectors including steel, solar batteries, aluminum, and lithium cells to enhance domestic manufacturing.

Finance Minister Nirmala Sitharaman is set to present the Union Budget for fiscal year 2024-25 on July 23. ICC President Ameya Prabhu emphasized the need for protective measures to support domestic industries in these sectors.

Prabhu stated, "Rationalizing customs duty in these specific sectors could significantly boost domestic manufacturing and position India as a global manufacturing hub." He pointed out that levies on raw materials particularly affect downstream firms.

He also suggested correcting the inverted duty structure by reducing the duty on mixed petroleum gas from 5% to 2.5%. Additionally, he recommended increasing duties on polymers to 10% to decrease import dependency and drive India towards self-sufficiency in petrochemical manufacturing.

Highlighting the aluminium foil sector, Prabhu noted that the domestic industry suffers due to anti-dumping duty on raw materials while finished goods from China enter duty-free, leading to significant losses.

On taxation, the chamber suggested establishing a commission to review and simplify the Income Tax Act of 1961, which has grown complex due to yearly amendments, resulting in numerous legal cases.

Prabhu further advised against imposing tax on dividends and mentioned that ICC has expanded internationally, opening 25 chapters in countries like New Zealand, the US, Europe, Australia, Korea, and the Middle East.

(With inputs from agencies.)