Proposed Reduction In Basic Customs Duty on Plastics.

As a part of Non-Agriculture Market Access Negotiations (NAMA), WTO members (which includes India), have agreed to reduce bound tariffs based on a non - linear Swiss Formula. What this in effect means is that India cannot raise the Basic Customs Duty in most plastic items beyond 13.3% (in some items this rate is 15%), under any circumstances. So, import of Plastics into India from any WTO member country will be allowed at a peak rate of Basic Customs duty of 13.3% or lower (The Basic Customs duty in Plastics, currently applicable is anyway below 13.3%, but it cannot be raised beyond this level as per the Agreement).

In addition to the above, a further reduction in the peak rate of Basic Customs Duty that can be applied, is being sought for Chemicals & Plastics sector, under the Chemicals Tariff Harmonisation Agreement (CTHA). As per this Agreement, the Basic Customs Duty cannot be increased beyond 6.5% for a specified list of Chemicals & Plastics items. The list of plastic items which have been covered for negotiations under this Agreement is attached herewith. We seek your feedback on whether the peak rate of Basic Customs Duty can be reduced from 13.3% (or 15% in some cases as indicated in the attached list) to 6.5% for plastic items covered in the list. The Basic Customs Duty that was actually applicable on these items in 2008-09, is also indicated in the attached list.

Source : plastemart.com