Association of Indian Chambers of Commerce on Thursday asked the government to halve the customs duty on crude oil and other petroleum products to ease the burden of domestic industry on account of rising international crude prices.
"Customs duty on crude should be cut to 5 per cent from 10 per cent and on other petroleum products to 10 per cent from the present 20 per cent," chamber president M K Sanghi said.
Centre should rationalise the duty structures to help the domestic industry bear the burden of rise in crude oil prices, he said in his submission to the finance ministry.
Government earned Rs 10,670 crore (Rs 106.7 billion) from customs duty on imported petroleum products last fiscal, including Rs 7,619 crore (Rs 76.19 billion) on crude oil alone, Assocham noted. Though duty cut would reduce Centre's revenue collections, it was the only way to check the impact of volatility in global oil price hike on domestic petroleum sector, the chamber said.
Most oil companies have recorded a dip in their profits for 2003-04, it said, adding higher customs tariffs was one of the reasons for the decline.
More from rediff