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Indian MMF sector reiterates demand to abolish excise duty
01
Jan '15
Indian synthetic fibre and yarn producers have urged the Union Ministry of Finance to abolish excise duty of 12 per cent levied on the industry and bring it at par with the cotton fibre and yarn sector.

“This will help the growth of the Indian textile industry and for achieving a larger share of the growing global market,” the Association of Synthetic Fibre Industry (ASFI) said in a statement.

ASFI in the letter, has requested the Government to totally abolish excise duty on all manmade fibres and filaments from current 12 per cent to nil.

“A major anomaly in excise duty structure between MMF and natural cotton fibre is affecting growth of the Indian textile industry and preventing it from achieving a larger share of the global market,” it said.

The trade body added, “It is this bias against man-made fibre and yarn that has left India far behind China in terms of investment, scale of manufacturing and exports.”

During the PM’s initiative of Make in India workshop held recently, the Textile Secretary in his presentation asked for rationalisation of duties and taxes in manmade fibre as compared to cotton.

“India is one of the largest producers of man-made fibres in the world with presence of large plants having state-of-the art technology,” SC Kapoor, director general at ASFI said.

He added, “MMF textiles constitute a big portion of our domestic consumption. However, India’s share in global exports of value-added textiles of manmade fibres is miniscule at less than 3 per cent.

“Of overall textile exports, 27 per cent comes from man-made fibres. In contrast, China has given a big push to synthetic textiles and almost 80 per cent of China’s textile exports consist of synthetics.”

In the letter submitted to various ministries, in the run-up to the Union Budget of 2015, ASFI said, excise duty on man-made fibre and yarn has become a roadblock for the growth of the textile industry.

Industry veterans and experts are also of the same view that the peculiar excise duty structure is holding up the Indian textile industry from achieving its full potential.

In contrast, major textile exporters like China, Thailand, Indonesia and Bangladesh, tax cotton and synthetic fibres as well as yarn uniformly.

“Correcting the excise duty anomaly in the textile sector has become vital now to attract more investment, step up production and boost exports through the ‘Make in India’ initiative,” Kapoor informed.

ASFI has suggested that if it is not possible to make MMF products, duty free in one go, the government should at least usher in an uniform duty structure of bringing the entire textile chain under 6 per cent excise duty.

Industry estimates indicate that this will yield additional revenue of Rs.10,000 crore to the exchequer and will also pave way for a lower GST rate for textiles and easy transition. (AR)

Fibre2fashion News Desk - India

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