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India proposes customs duty on CAD files for 3D printing

Jul '20
Pic: Shutterstock
Pic: Shutterstock
Pushing its case for countries to be able to tax electronic transmissions, India recently proposed imposing customs duties on computer-aided design (CAD) files needed for 3D printing. Electronic transmissions are at present immune from taxation under the World Trade Organisation (WTO) regulations under a moratorium. South Africa has been backing India’s stand.

If the moratorium continues, foreign firms can export any software duty-free to developing countries to 3D print products that they currently manufacture and that will lead to ‘disruption in traditional manufacturing, resulting in job losses and declining incomes’, especially in sectors like textiles and clothing, footwear, auto-components, toys, mechanical appliances and hand tools, India said.

“An important policy instrument available for this purpose would be to impose customs duties on CAD files necessary on 3D printing,” India said at the WTO.

A paper by the United Nations Conference on Trade and Development had pegged India’s potential annual revenue loss by not taxing electronic transmissions at around $500 million.

Thirteen WTO members, including Australia, Canada, South Korea, New Zealand and Singapore, opposed any such tax in their proposal submitted last month.

Rejecting their proposal, which is based on a study last year by the Organisation of Economic Cooperation and Development, India said: “We do not agree with the OECD assessment that technologies such as 3D printing are unlikely to have far-reaching implications on trade in the near term.”

If current growth of investments in 3D printing continues, half of the manufactured goods will be ‘printed’ in 2060 and if investments in 3D printing doubles, this target will be achieved in 2040, India said, citing studies.

“This will wipe out almost 40 per cent of cross-border physical global trade,” it said.

New Delhi also said not all software would fall within the scope of the moratorium as some of them could be delivery of services through Mode 1 or cross-border supply, according to Indian meida reports.

It also emphasised that removal of the moratorium does not mean countries will necessarily impose customs duties across the board.

Fibre2Fashion News Desk (DS)

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