Customs Duty Exemption on Natural Rubber - For Rest of Year?
BY Notification No. 128/2010-Cus dated 22.12.2010, the Customs Duty on Natural Rubber was reduced to 7.5 per cent for the remaining part of the financial year 2010-11; that is from 1st April 2011, the duty would get back to Rs. 20 or 20 percent which is lower. And apparently it did.
Now the Government has again reduced the rate of duty to 7.5 percent for the remaining part of the financial year 2011-12 for a quantity of 40,000 MTs; that is from 1st April 2012, the duty would get back to Rs. 20 or 20 percent, which is lower.
Last year the duty was reduced in December, but this year they have done it in July.
There is a shortage of rubber in India and during the rainy season, not much of rubber could be tapped in Kerala. The tyre industry had been representing to the Government to totally exempt rubber from customs duty and in the last week of June, share prices of tyre companies had shot up on a rumour that Government had totally exempted rubber. But nothing happened yesterday when the Government had given a partial exemption. JK Tyre, Apollo Tyres, Goodyear – all went down marginally in the BSE, while there was a small increase in MRF. And almost the same situation prevails today too. Maybe the market had already discounted the reduction in Customs Duty or it was not aware of the Customs Exemption.
The exemption will bring some relief to tyre companies but will not be welcomed by rubber growers, as the price will come down. Customs duties are not simply about collecting taxes.
Notification No., Dated : July 13, 2011