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Picture tube firms up in arms over duty cut

T R Vivek in New Delhi | February 16, 2004 10:57 IST

The government's hasty withdrawal of its decision to reduce the peak import duty on colour picture tube glass from 25 per cent to 10 per cent has made the colour picture tube makers like Hotline and Samtel Color go up in arms.

"Such a quick reversal of a decision can only be at the behest of certain vested interests groups," said an industry insider.

Playing it safe, the Consumer Electronics and Television Manufacturers Association said that it was not fair for the government to single out CPT glass.

The association said it would send another representation to the commerce ministry asking it to reconsider the decision.

Under the free trade agreement with Thailand, which comes into effect from March 1, the import duties on items like colour TVs, refrigerators, airconditioners and certain auto components would be 50 per cent of the existing duties.

Which means that CTVs, CPTs and CPT glass could be imported from Thailand paying an import duty of 12.5 per cent as against the existing 25 per cent applicable for other countries not covered by the FTA.

Heeding to the demand of the CPT and colour television makers, who contended that the government was creating an inverted duty structure by keeping the duties on raw materials higher than that on finished products, the government on January 23 decided to lower the import duty on CPT glass and a host of other auto components.

Nearly a week later the government issued another notification excluding CPT glass from the list.

"The fundamental reason for levying import duty is that it gives local manufacturers some protection and encourages them to produce value added products. If finished goods become cheaper than raw materials, the Indian consumer durables industry, which in any case is faced with intense foreign competition, will be wiped out," said VN Masaldan, managing director, Hotline, a CPT and component maker.

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