​Inverted Duty Structure

In a bid to bolster the competitiveness of domestic manufacturing, the Indian government has initiated steps to correct the ‘inverted duty structure (IDS)’ impacting key sectors.

• According to government, products prioritized under the Make in India initiative, such as washing machines, air purifiers, solar glass, paper, furniture, apparel, and jewellery have been shortlisted for this corrective action.

What is Inverted Duty Structure?

• The inverted duty structure arises when inputs and raw materials attract higher taxes than finished products.
• This anomaly makes the import of finished goods cheaper than raw materials, disincentivizing local production.
• It further complicates the Goods and Services Tax (GST) process ....