SIMA hails removal of customs duty on crude, petroleum products
Southern India Mills' Association hails removal of customs duty on crude and petroleum products.
The ratio of synthetic and cotton fibre consumption in India is 40:60 as against the reverse in the world due to higher fibre price and the Indian textile industry is not in a position to compete with the countries like China, Indonesia, etc., in synthetic textile products markets due to high cost of production.
Due to longer life and easy laundering, cloths made out of the synthetic yarn are predominantly used by the people below the poverty line and even the middle class population in the country. Therefore, it is essential to bring down the cost of synthetic fibre not only to have a level playing field in the global market, but also to clothe the poor masses of the country at affordable cost.
Against this background, the textile industry Associations have been pleading the Centre to reduce the customs duty on petroleum products to reduce the input cost. Yesterday, the Government has removed the customs duty of 5% on crude oil and other petroleum products.
In a Press Release, Mr.J.Thulasidharan, Chairman, SIMA has welcomed the decision taken by the Centre for removing the customs duty by 5% and also reducing the central excise duty on diesel oil by Rs.2.60 per litre from Rs.4.60 to Rs.2.00. SIMA Chairman has stated that the reduction of customs duty would reduce the cost of synthetic fibres and also various plastic materials used by the textile industry, which is the need of the hour for the industry in the recessionary period to revive its competitiveness.
He has hoped that the synthetic fibre manufacturers would pass on the benefit to the synthetic textile industry. He has pointed out that the removal of customs duty would also encourage investments in the technical textiles. The elimination of customs duty on crude oil and other petroleum products would also help to reduce the inflation said Mr.Thulasidharan.
SIMA Chairman has appealed to the Government to revise the DEPB benefit extended for the export of synthetic fibres consequent to the removal of customs duty. He has pointed that the Centre can make up substantial losses made out of the removal of customs duty by reducing the DEPB benefit extended for the export of synthetic fibres.
He has also stated that the reduction of DEPB benefit would discourage exports and make the raw material starving synthetic textile industry in the country to have adequate availability of the fibres at a competitive rate and increase its consumption.
SIMA Chief has, however, criticized the hike in diesel price by Rs.3.00 per liter in spite of reduction of central excise duty from Rs.4.60 to Rs.2.00 per liter. He has said the industry has been pleading the Central Government to exempt the liquid fuels meant for power generation totally from all the central levies as the industry particularly in Tamilnadu is facing over 45% power shortage.