Source: The Economic Times, Dec 16, 2019
NEW DELHI: Ahead of the Budget, the commerce department has asked the finance ministry to levy border adjustment tax (BAT) on imported goods to offset the impact of levies such as electricity duty, clean energy cess, levies on fuel and royalty that are not part of goods and services tax (GST).
“Such taxes (which are not part of GST), while resulting in an increase in the cost of production of domestic goods, also place them on an unequal footing vis-a-vis imports rendering our exports uncompetitive,” commerce secretary Anup Wadhawan has proposed to the revenue department.
An estimate suggested that coking coal, which faces clean energy cess, constituted 40% of the raw material cost producing steel, officials told TOI. An analysis shared by a steel manufacturer with the commerce department has estimated that the share of non-creditable taxes in the sale price of hot-rolled coil may be as much as 5% of the sale value, while in case of imports it could be around 3% of the price.
The commerce secretary has sought an urgent status report to brief commerce and industry minister Piyush Goyal on the proposal. Since taking charge six months ago, Goyal has been seeking a series of steps to discourage imports, especially of “nonessential” items, to boost local manufacturing.Read the rest of this entry »