Impact of taxes in Chemical Industry - WorldOfChemicals

Taxes and Duties: Impact in Chemical Industry

Taxes in Chemical Industry

The Indian chemical industry is on an agitation pertaining to the impact of various tax implementations. Considering this fact, the Indian chemical industry is continuously facing quite severe challenges due to the mounting taxations.

For any chemical company it is often the logistics which will make the difference between profit and loss. The cost of transportation, insurance, handling fees, paperwork and taxes all take a duty or charge on a chemical business’s bottom line. Therefore one of the primary reasons of a chemical processing plants location is the reachability of the primary markets. So if the chemical plants’ reach is limited, a company needs to import or export the goods and it is at this point that administration takes its biggest role.


Tariff and Trade Barriers in India

High duties have been projected on US walnuts, chickpeas, lentils, boric acid and diagnostic reagents, along with other goods, which has an additional load of $290 million. The augmented levies, proposed in June 2018 after the US proclaimed high tariffs on specific steel and aluminium products from which India had sought exemption, have been deferred six times in view of the bilateral trade dialogue.

The slowdown of the economic conditions has strongly affected the Indian exports. Chinese Government has increased the export incentive for major from 5% to 9%. Likewise the levy for polymers has been increased to 13%. It is vital that Indian exporters should be given similar supports to stay ahead in competitive markets in the international market.


GST Tax on Indian Chemical Industry

The impact of GST on the Indian industrial sector looks constructive, especially for the chemicals industry. Chemicals businesses in India have undergone the wrath of additional taxations on the production capacity as well as the consumption demands.

The future bene fits of lesser production costs and decreasing in the transactional tax rates will have a decrease effects on the growth of paints and construction industry. Booming of real estate industry will persist to generate demand in construction chemicals market, but the execution of GST will make sure that the construction chemicals retailers are not edged away from the sales profits. The absence of warehousing and supply chain payments help to maintain the affordable prices and endorse the demand of chemicals. Now, the implementation of GST will be relevant to the chemicals that the Non-uniformity of VAT rates.


How environment is concerned

It has been projected as to new taxes on environmentally damaging chemicals will assist to bring down their use. Recent research describes that levies are more likely to be successful in reducing usage of toxic chemicals, as well as more politically appropriate. 

For various chemical products, for instance fertilisers, the impact differs according to the varied geographical area and nature of the environment. In the case of fertiliser compounds it is difficult and costly to monitor and control end-users of chemical products. Hence, government finds it easier to tax wholesalers or importers of chemical compounds. This taxation augments the cost of the damaging chemicals and so acts as an incentive for manufacturers of products containing these chemicals to minimise their usage.

Import and export duties on critical chemical products which are supplied to 99.9% of the global population are a tax on us all. A world wherein free trade and open markets are gradually growing a geopolitical objective, the industry gives vital employment to so many deserves a better tax break. uses cookies to ensure that we give you the best experience on our website. By using this site, you agree to our Privacy Policy and our Terms of Use. X