What are inverted duties?

Question

what do you thing the upcoming budget has in store for it?

Answer 1

This is all I could find.

Inverted duties (cases where duties for inputs are higher than those for the final product).

Answer 2

Inverted duties are duties (taxes on imported goods) that are higher for the raw materials that make up a product vs the finished product itself.  For example, pretend you make motorcycles and you have to import all the pieces into the US to assemble it.  If there is an inverted duty on this product the parts will have a duty that is higher than if you just imported the entire motorcycle as 1 piece.  So, you wind up having to pay more b/c of the higher tax rate vs the competitor who paid less b/c the tax on his completed motorcycle that he imported was lower.  This creates an economic advantage for him over you.

Answer 3

It's like being "upside down" with car payments...You owe more than you can get for it.  Inverted duties (taxes) in this case means that just the import taxes alone on a product are higher than the actual cost of the product, hence, the duties (taxes) are inverted. (The taxes cost more than what you're buying.