The recommended antidumping duty and countervailing duty will also have a significant cost impact on producers
Do you think that you are over spending on your soap, shampoo and detergent, then in few months it’s going to trouble you more. As prices of soap, detergent and shampoo could go up if the proposed antidumping duty and countervailing duty on the key raw material saturated fatty alcohol is implemented. The move is already opposed by the Indian Surfactant Group (ISG), which has urged the finance minister not to implement the new tariff structure.
"The extraordinary duties will bring in the dreaded inverted duty structure and will render the user industry uncompetitive and will eventually impact the employing capability of these companies as they may be forced to downsize their operation to survive and remain profitable," Manoj Jha, convener at ISG, said in a letter to Union finance minister Nirmala Sitharaman as reported by ET.
"Increasing the cost of the end product will make the end product less competitive and undesirable in the market. Given that India is already witnessing high rates of consumer inflation, any further price increase will add to the pain of the Indian consumers," said the ISG letter.
Few months back commerce minister asked for a higher rate for anti-dumping duty with additional countervailing duty on imports of saturated fatty alcohols (SFA) from Indonesia, Malaysia and Thailand.
This will also have a significant cost impact on producers, and users of Sodium laureth sulfate (SLS), who manufacture end products such as detergent, shampoo and other hygiene-related products.
Currently under the free trade agreements, SLS as a final product is subjected to 5 per cent duty as compared to SFA, which gets far higher duties at an intermediary stage. Now, with the new recommendation the levy of countervailing duties, it will lead to an inverted duty structure, which will incentivise higher imports of downstream products such as SLS and finished goods such as shampoos, leading to loss of business and employment as per industry body.