The government may address the issue of reverse duty structure on some steel products, ie higher taxation on raw materials and lower rate of tax on finished goods.
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It said the government may consider abolishing customs duty on raw materials used to manufacture flat products, including sheets made of stainless steel. At present, the imports on ferro nickel and SS scrap, the major raw materials used in stainless steel flat products, are higher than the finished products coming from countries with Duty Free Trade Agreement (FTA). According to sources, this is adversely affecting the domestic stainless steel industry. Raw materials like ferro nickel and SS scrap are also not available in sufficient quantity and good quality in India. These raw materials attract about 15 percent duty. The reverse duty structure has an adverse effect on domestic industries. Because on one hand they have to pay a higher price for raw materials as a duty, while the duty on the finished product is less and consequently the cost is less.
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India entered into free trade agreements with many countries. These countries include Japan, South Korea and Singapore. Apart from this, negotiations are going on with many other countries.