Budget 2022: Improving cost structure in aluminum industry to reduction in tax on cigarettes - Check these sectors wishlist
Budget 2022 Expectations: There are a lot of anticipations and discussions regarding the upcoming Union Budget 2022. Union Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2022 on February 1. It is expected that this year also, the government can make many important announcements to strengthen and empower the economy. Furthermore, the Omicron variant of COVID-19 has raised concerns amid the economic recovery in the economy.
Let us see what Pradeep Multani, President, PHD Chamber is expecting from Budget 2022 for various sectors.
Aluminum industry: Improving cost structure and how?
For this sector, PHDCCI urges to improve the cost structure of the Indian Aluminum industry and enhance competitiveness. In order to achieve this, it is suggested to reduce the basic customs duty on the following critical raw materials like Calcined Petroleum Coke (for anode making in the Aluminum industry), Raw Petroleum Coke (for anode making in the Aluminum industry), Caustic Soda Lye; Aluminum Fluoride and Green Anode/ Pre-Baked Carbon Anode all by 2.5 per cent.
Additionally, elimination of cess on coal (GST Compensation cess of Rs.400/MT) to support high power-intensive industries like Aluminium and increase in basic customs duty on Aluminium scrap (HS Code 7602) at par with primary metal to proposed 10 per cent, are suggested.
PHDCCI also urges the inverted duty of Caustic Soda Lye to be rationalized and reduced from 7.5 per cent to 2.5 per cent. It also urges for the rationalisation and reduction of inverted duty on Aluminium Fluoride from 7.5 per cent to 2.5 per cent.
PHDCCI notes that being the primary raw material, the import duty on Alumina should be rationalized and reduced from 5 per cent to nil to enhance raw material security for Aluminium industry, encourage domestic value addition and exports of finished Aluminium products. Source: Reuters
Reduction of tax on cigarettes?
PHDCCI feels that appropriate budgetary support should be considered for reinstatement of benefits under the FTP for Tobacco and Tobacco Products (covered under Chapter 24 of the Customs Tariff) by way of inclusion under RoDTEP. It would be appropriate to consider a reduction of tax on cigarettes which would help the legal industry to recoup volumes from the illicit trade and provide higher revenues to the Government, noted PHDCCI. Any increase in taxes will provide further impetus to the illicit trade and adversely impact revenue collection. Source: Reuters
Uniform tax for processed and packaged food
PHDCCI urges that all packaged (whether branded or unbranded) cereals and staples including rice, wheat, millets and their flours should be uniformly tax under GST at the rate of 5 per cent, irrespective of whether the brand owner forgoes rights, etc. in order to maintain an equitable tax structure and avoid revenue leakage. Furthermore, PHDCCI also urges the exemption from GST to be granted for all infrastructure-related services for setting up of new plants / factories / storage infrastructure which are in relation to the processing of agricultural produce into foodstuff to provide a fillip to the food processing sector. Source: Reuters
Revising the timeline for issuance of Credit Notes for education and stationary products
Stationery Industry where 55-60 per cent of sales to wholesale dealers are recorded in the Jan-March quarter of the financial year and Sales to end consumers are made subsequently between March to August. Hence, sale returns of unsold inventory, if any are identified and initiated thereafter. In this regard, PHDCCI feels that revising the timeline for issuance of Credit Notes towards receipt of sales returns to 12 months from the end of the Financial year or at least till the time filing of Annual Returns for the said Financial Year. Source: Reuters
Government to work in partnership for pulp and paper industry for the global competitiveness
PHDCCI urges the government as well as the industry to work in partnership to ensure creation of sustainable sources of fibre required by the pulp and paper industry for the global competitiveness. The recommendations given are as follows:
1) 10 per cent customs duty on pulp be imposed only for Hard Wood Chemical Pulp and Bleached Chemi Thermo Mechanical Pulp (BCTMP)
2) Imposition of Customs Duty of 10 per cent on import of Hard wood chemical pulp under Tariff ID 47032900,
3) Sub-classification of the existing Tariff classification 47050000 (Bleached Chemi Thermo Mechanical Pulp, (BCTM Pulp)} in to Hardwood BCTMP and Softwood BCTMP
4) Imposition of 10 per cent Customs Duty on import of Hardwood BCTMP. Source: Reuters