About

• An inverted duty structure refers to a situation where the tax rate on inputs (raw materials or intermediate goods) is higher than the tax rate on the final product. 
• For example, suppose the tariff on the import of tyres is 10% and the tariff on the imports of natural rubber which is used in the production of tyres is 20%; this is a case of inverted duty structure.
• Inverted duty structure impacts the domestic industry, as manufacturers have to pay a higher price for raw materials in terms of duty, while the finished products land at lower duty and cost.