Riding on duty increase in Budget 2016, condoms may cost more

Prices of condoms may go up as government pushed basic custom duty by 10%. Government on Monday has raised basic custom duty (BCD) on natural latex rubber made balloons

Prices of condoms may go up as government pushed basic custom duty by 10%. Government on Monday has raised basic custom duty (BCD) on natural latex rubber made balloons by 10%. While the existing duty is 10%, finance minister Arun Jaitley in his budget speech proposed to raise the duty to 20%.

While it may not impact the consumer the directly, the increase in basic custom duty may push the prices for condoms. (Sanchit Khanna/HT Photo)

While it may not impact the consumer the directly, the increase in BCD may push the prices for condoms. “We will access its implications but otherwise the measure to increase custom duty on latex is not aligned with government’s vision of population control plan,” said RC Juneja, CEO of Mankind Pharma which produces the largest selling condom brand in India, Manforce. Manforce occupies over 40% of condom market in India followed by SKORE and Moods. “We may pass the price increase to consumer after trying our best to absorb the duty hike.”

While companies are still trying to understand the implication and impact of increase in BCD, tax experts claim that the price rise will be for shorter period. “The step taken by government is to boost local intermediary industries and discourage import of latex,” explained Bipin Sapra, partner, indirect tax Ernst & Young. “In short run, companies may face the brunt of higher custom duty but in long terms their prices will come drastically down, once they start procuring goods from local manufacturers.”