Increase in import duty on rubber to affect tyre industry
None of the demands put up by the tyre industry has been met
Budget Provisions:
- Customs duty on Natural Rubber has been increased from 35% to 70%.
- 16% Special Excise Duty retained on tyre for replacement.
None of the demands put up by the tyre industry has been met
Industry demnads were as follows:
Reduction in excise duty on tyres, especially tyres for commercial vehicles as the
incidence of taxation of 55-58% continues to be extremely high.
Fixation of import duty on raw materials for tyre industry at a rate, which is 10%
lower than import duty on tyres.
Tyres should be excluded from concessional rate of import duty under the Bangkok
Agreement as the declining trend in import duties in India and rapid industrialisation in
South Korea makes this concession uncalled for.
Reduction in import duty on butyl rubber from 35% to 10%
Import duty waiver on steel tyre cord and polyester tyre cord.
Imposition of nominal excise duty on ADV tyres
No cess should be levied on imported rubber.
Industry Impact:
The increase in customs duty on Natural Rubber from 35% to 70% will make rubber
imports prohibitive for the tyre industry. As tyre industry consumes about 48% of the
natural rubber, it was virtually dictating terms to the domestic rubber manufacturers.
Now, its power is severely curbed through doubling of import duty on natural rubber.
Overall, the impact of the budget on the tyre industry is definitely negative.
The reduction in duties on tyre industry's other raw materials like SBR, PBR, Carbon
Black and Steel tyre cord will benefit the industry to some extent.
Companies affected :
Apollo Tyres, MRF
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