Mr Pradeep Multani, President, PHD Chamber

PHD Chamber Pre- Budget Memorandum for specific sectors

1. ALUMINIUM INDUSTRY
2. PHDCCI urges to improve the cost structure of the Indian Aluminium industry and enhance competitiveness, it is suggested to reduce the basic custom duty on the following critical raw materials – Calcined Petroleum Coke (for anode making in Aluminium industry), Raw Petroleum Coke (for anode making in Aluminium industry) , Caustic Soda Lye; Aluminium Fluoride and Green Anode/ Pre-Baked Carbon Anode all by 2.5%.
3. Elimination of cess on coal (GST Compensation cess of Rs.400/MT) to support highly power intensive industries like Aluminium.
4. Increase in basic custom duty on Aluminium scrap (HS Code 7602) at par with primary metal to proposed 10%,
5. PHDCCI urges the inverted duty of Caustic Soda Lye to be rationalized and reduced from 7.5% to 2.5%
6. PHDCCI urges the inverted duty of Aluminium Fluoride to be rationalized & reduced from 7.5% to 2.5%.
7. Being the primary raw material the import duty on Alumina should be rationalized and reduced from 5% to nil to enhance raw material security for Aluminium industry, encourage domestic value addition and exports of finished Aluminium products.

2. CIGARETTES AND OTHER TOBACCO PRODUCTS 

1. PHDCCI urges for appropriate budgetary support be considered for reinstatement of benefits under the FTP for Tobacco and Tobacco Products (covered under Chapter 24 of the Customs Tariff) by way of inclusion under RoDTEP
2. It would be appropriate to consider a reduction of tax on cigarettes which would help the legal industry to recoup volumes from the illicit trade and provide higher revenues to the Government. Any increase in taxes will provide further impetus to the illicit trade and adversely impact revenue collection.
3. Correction of the disproportionate rate of ad-valorem GST Compensation Cess of 36% for King-Size filter cigarettes (>75mm in length) to 5%, in line with the levy of 5% ad-valorem GST Compensation Cess on all the other length segments – this measure will help combat the contraband trade in international brands of cigarettes smuggled in to the country, the bulk of which belong to the King-Size filter segment.
4. Introduction of a new segment of ‘less than 60mm length’ filter cigarettes with an appropriate tax levy to enable the legal cigarette industry to mount a serious challenge to the domestic duty-evaded cigarettes that are offered to consumers at Re.1 and Rs.2 per stick, i.e., prices that are lower than even the applicable taxes. Such a measure will help reclaim market share from the domestic illicit trade with consequential benefit to revenue.
5. Extending the tax net to non-Flue Cured Virginia Tobaccos which constitutes more than 90% of tobacco consumption in the country. The audit trail generated by this levy will help eliminate large-scale downstream tax evasion by manufacturers of value-added products.
6. Tobacco and tobacco products are the only goods on which both National Calamity and Contingent Duty (NCCD) and GST are levied. Continuation of NCCD is a retrograde step and, accordingly, the Government is requested to consider its abolition.

3. PROCESSED AND PACKAGED FOODS

1. PHDCCI urges that all packaged (whether branded or unbranded) cereals and staples including rice, wheat, millets and their flours should be uniformly tax under GST at the rate of 5%, irrespective of whether the brand owner forgoes rights, etc. in order to maintain an equitable tax structure and avoid revenue leakage.
2. PHDCCI urges the exemption from GST to be granted for all infrastructures related services for setting up of new plants / factories / storage infrastructure which are in relation to processing of agricultural produce into food stuff to provide a fillip to the food processing sector.
3. Benefit of exemption from GST & any such benefits as may be available for Skimmed Milk Powder (SMP) may be extended to all type of supplies, where such SMP by the recipient is used for production of Milk, Curd and Lassi.
4. Dairy Farmers are the backbone of our economy, rationalization of the rate of GST on Milk based products like Ghee and Dairy based drinks from 12% to 5% will promote the consumption of these products and provide remunerative rates to Dairy Farmers.

4. EDUCATION AND STATIONARY PRODUCTS

1. Stationery Industry where 55%-60% of sales to wholesale dealers are recorded in the Jan-March quarter of the financial year and Sales to end consumers are made subsequently between Mar-August. Hence, Sale returns of unsold inventory, if any are identified and initiated thereafter. Hence, PHDCCI recommends revising the timeline for issuance of Credit Notes towards receipt of sales returns to 12 months from the end of the Financial year or at least till the time filing of Annual Returns for the said Financial Year.

5. PULP, PAPER AND PAPERBOARDS

1. PHDCCI urges the Government & Industry to work in partnership to ensure creation of sustainable sources of fibre required by the pulp and paper industry for the global competitiveness.
   1. 10% customs duty on pulp be imposed only for Hard Wood Chemical Pulp and Bleached Chemi Thermo Mechanical Pulp (BCTMP), as under: –
   2. Imposition of Customs Duty @ 10% on import of Hard wood chemical pulp under Tariff ID 47032900,

• Sub-classification of the existing Tariff classification 47050000 (Bleached Chemi Thermo Mechanical Pulp, (BCTM Pulp)} in to Hardwood BCTMP and Softwood BCTMP, and,

1. Imposition of 10% Customs Duty on import of Hardwood BCTMP