The Centre will likely address the inverted duty structure affecting domestic manufacturing in key sectors such as textiles, leather and engineering goods in the upcoming budget, two people aware of the matter told MINT:
Last month, the commerce ministry had urged the finance ministry to rectify the situation where raw materials face higher taxation than finished products. This inverted duty structure, impacting over a dozen items, is set to be a focal point in the Union Budget for FY 2014-25.
Such a tax structure undermines the competitiveness of Indian manufacturers, notably in textiles and apparel, rendering domestically-produced goods more costly than imported finished products.
The finance ministry will likely consult federal think tank Niti Aayog, which is examining tax issues including the inverted duty structure in the engineering, leather, and textiles sectors, on of the people cited above on the condition of anonymity.
Source: livemint
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