The custom duty on all fiber intermediates (PX, PTA & MEG) to be at 2 percent, polymers at 5 percent, yarns & fibers (Synthetic, Cotton & Natural) at 10 percent and all types of fabrics at 12.5 percent.
2. Excise Duty rationalization
(a) The excise duty on inputs is more than the excise duty on the finished goods with a result that the CENVAT accumulation is actually rising instead of reducing.
(b) Besides above, it is highly desirable that there should be progressive convergence of excise duty between all fibers with a fiscal regime neutral across all the fibers and the bias in favour of any particular fiber should be done away with immediately. It is suggested that:
Implement uniform 4 percent excise duty on the entire value chain i.e. fiber intermediates and yarns & fibers (synthetic, cotton, blended & natural).
With the implementation of uniform excise duty on yarns & fibers (synthetics, cotton & natural fibers), will lead to standardized duty drawback rates on all the fibers & yarns.
Strangely without collecting any duty on cottons and yarns & fibers, the Government losses Rs330 crore duty drawback on cotton yarns, which could be avoided.
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