2007-TIOL-NEWS-019-Part II, Dated: Monday, January 22, 2007

North Block comes out with mini-budget on Customs front; Duty reduced on items contributing to inflation; Ban on skimmed milk exports in the offing

By TIOL News Service

NEW DELHI, JAN 22, 2007 : ON the Customs front, the North Block has virtually come out with a mini-budget, ostensibly to curb inflation and also to lend a tangible thrust to the infrastructure sector. In a late evening move, without making the Notifications public, the Ministry of Finance has reduced the basic Customs duty on a large basket of products with immediate effect!

Sources say that what provoked the Govt to come out with such a large-scale duty change now are the rising prices of many items contributing to the inflationary trend.

The items on which the duty has been lowered are as follows :

· Specified capital goods and their parts, and winding wires from 12.5%/10% to 7.5%.

· Project imports from 12.5%/10% to 7.5%.

· Extension of project import rate of 7.5% to 'Airport development projects' and 'Metro Rail projects'.

· Inorganic chemicals, like halogens (Fluorine, Chlorine, Bromine, Iodine), sulphur, carbon , hydrogen, rare gases (Nitrogen, Oxygen, Silicon, Phosphorus) and alkali metals (Sodium, Calcium etc) from 10% to 5%.

· Carbon Black Feedstock from 10% to 5%.

· Primary and semi-finished forms of Copper, Aluminium, Zinc, Tin, Other base metals from 7.5% to 5%;

· Ferro-alloys Stainless steel and other alloy steel from 7.5% to 5%

· Pipes and tubes of aluminium, copper and zinc (heading 7907) from 12.5% to 7.5%.

· Calcined alumina from 7.5% to 5%.

· Refractories from 7.5% to 5% and specified raw materials of refractories from 10%/7.5% to 5%.

· Portland cements from 12.5% to Nil.

Meanwhile, sources in the Govt also indicate that the exports of skimmed milk has grown manifold and the domestic prices are going up. The Mother Dairy has announced to hike its price from Wednesday. Given that summer is only a couple of months away when the domestic consumption of milk will go up, a proposal has been mooted to curb its exports. And in days to come the Union Cabinet may take a decison against the exports.