June 26: A parliamentary committee has instructed the government to amend its discriminatory tax policy in a show of support to the agitating industrialists who have accused the government of adopting a policy that has threatened the existence of domestic industries.
The Industry, Commerce, Labour and Consumer Welfare Committee of the House of Representatives has instructed the Ministry of Industry, Commerce and Supplies to revoke its decision on the customs duty and excise duty imposed for importing the raw materials required for producing sponge iron and prime billets. Stating that the new tax policy is discriminatory, the house panel has directed the government to scrap the new tax rate and give continuity to the previous provision in this regard.
A meeting of the committee last week instructed the government amend the tariff rate saying that the discriminatory policy of the government was benefitting some industries while others were on the verge of collapse.
The parliamentary committee on Industry, Commerce, Labor and Consumer Welfare directed the government to reconsider its decision saying that some industries are likely to collapse due to the new tariff rates while many people face the prospect of losing jobs. The house committee also noted that the government’s revenue collection will be affected in such a situation.
The replacement bill issued by Finance Minister Janardan Sharma almost a year ago had waived the customs duty of Rs 4.75 and excise duty of Rs 1.6 imposed on the import of sponge iron. Meanwhile, the government had increased the excise duty on import of prime billet from Rs 1600 per ton to Rs 2500 per ton.
This benefitted five or six industries that produce iron rods from sponge iron. However, around two dozen industries that produce billets in the country collapsed due to this discriminatory policy of the government, according to the industrialists.
A letter sent to the government by the house panel states that the government should give continuity to the provisions that were in place before it introduced the replacement bill.