Forthcoming Budget - Industry players optimistic

16 Feb '08

6 min read

Official sources from Indorama Group, producers of polyester fibre, said, “High international prices of MEG is a matter of concern to the MMF sector. The cost of imported MEG goes up further as the duty element alone adds up to another 26.5 percent on the landed cost and the ad-valorem duty system further increases the cost of material. Even on locally procured MEG, total excise duty comes 12.36 percent and the entire amount is not salvageable through CENVAT. This anomaly needs to be removed immediately by bringing the Excise Duty on MEG at par with PTA.

Presently, Excise duty on MEG is 12 percent whereas on PSF and Yarns it is 8 only, the duty on raw materials should not be higher than finished goods. In any case SAD at 4 percent leviable on imports of MEG should be withdrawn.

Excise duty on both synthetic fiber and cotton should be 4 percent, to provide level playing field to all yarn & fiber producers both natural and man-made. Simultaneously, on raw materials/intermediates of synthetics fibers & filaments it should be reduced to 4 percent.

The Central Excise laws to be amended suitably, that unutilized proportion of the duty may be reimbursed to the assessee at the earliest and continued imposition of 1 percent NCCD on POY and FDY is extremely anomalous. Therefore the levy of NCCD on PFY should be abolished immediately.

Mr Vinod Jhawar, Managing Director of Dhanlaxmi Fabrics, manufacturer and processor of quality fabric, said, “Excise & Import Duty on textile industry is not getting CENVAT, so ultimately industry is paying for their inputs and no charges on output which ultimately adds burden on manufacturers. So it will be better, if CENVAT is imposed on output or removed from inputs by industry.”

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