Home Retail Import duty on luxury goods to be rationalised

    Import duty on luxury goods to be rationalised


    The government of India is expected to rationalize the import duty to check revenue losses that are incurred when an Indian buys such products in foreign markets.

    “India has high tariffs and we recognise that if you go abroad and buy, then it is a revenue loss for India. So we are working on both duties and countervailing duties,” Union Commerce Minister Kamal Nath said at a conference.

    The minister confirmed that the commerce ministry is working on it and has also forwarded the proposal the finance ministry to consider duty cuts.

    “We will continue to urge the finance minister for some rationalisation and if he does that then I do see some reforms,” Nath said. He also said there was a need to differentiate high and low end products so that differential tariffs could be applied.

    In India, the Customs Act governs the levying of tariffs on imports and exports and frames the rules for customs valuation.

    The April 1993 trade policy merged the auxiliary duty with the present duty. Total duties on imports now consist of basic duty (ranging from zero to 65 per cent) plus additional or countervailing duties (equal to excise duties). On manufactured ‘luxury’ items, total import taxes can amount to 150 per cent.