Par Panel suggests imposing duty on capital goods import

New Delhi: A Parliamentary panel Monday suggested the government to consider imposition of duty on imports of capital goods in a bid to give a level playing field to domestic capital goods manufacturers vis-a-vis foreign players.

"The government may look into re-imposition of countervailing duties on imports of plants and machinery and rationalise the excise duty structure so that indigenous industrial units are not put in a disadvantageous position vis-a-vis the foreign players," Parliamentary Standing Committee on Industry said in a report tabled in Parliament.

Countervailing duty is an import duty imposed to neutralise the negative effects of export subsidies.

The report said the Committee is disheartened to note that the capital goods sector is almost handicapped due to free flow of imported technology.

"Such waiver of duty on import would harm the domestic investment and players in this field," the panel, headed by Tiruchi Siva, said.

It added, "It is tragic that our capacity to manufacture power plants and other capital goods equipments are not being harnessed due to liberal import regime with zero percent custom duty."

The report added that import of second hand goods must be discouraged if not banned.

Companies like BHEL, HEC, HMT and other national level companies should be promoted in the sector. "Bigger companies like BHEL should be made fountainheads of capital goods exports," it said.

PTI