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Fertiliser imports to attract 1% additional duty
Aug. 21, 2012
The India Finance Ministry has made it clear that import of certain fertilisers such as urea, di-ammonium phosphate (DAP) and muriate of potash (MOP) would attract additional customs duty of 1 per cent.
These fertilisers now attract basic customs duty ranging from 2.5 to 5 per cent.
By clearly specifying the additional duty of customs at 1 per cent for such fertilisers, the revenue department has cleared the air on whether the duty rate (countervailing duty) should be 6 per cent or 1 per cent.
There was some confusion at the ground level as to whether the countervailing duty should be 6 per cent or 1 per cent. This has now been clarified and it is not a new impost, official sources said.
For fertilisers, excise duty stood at 6 per cent if Cenvat credit is taken by the manufacturer. If the Cenvat credit is not taken, then the excise duty is at 1 per cent, it was pointed out.
NO MAJOR IMPACT
The Finance Ministry move to clarify on the additional levy will not have any major impact on the prices for end users, industry sources said. Urea is currently imported on government account through various entities such as MMTC and IFFCO, among others.
Phosphatic fertilisers are de-controlled and the private players import both the raw material as well as end-products. India is heavily dependent on imports of phosphatic and potassic fertilisers (P&K) either in finished or raw material form. The prices of P&K fertilisers are already much higher than urea, which has prompted farmers to shift to the latter.
The Centre has so far forked out Rs 35,402 crore towards fertiliser subsidy this fiscal as against budgetary estimate of Rs 65,592 crore.
Source: The Hindu Business Line
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