The Union Budget 2014 has given a minor reprieve to semi-mechanised matches units in terms of reduced Excise Duty of 6 per cent from 12 per cent by allowing two additional processes of matches making.
Hitherto, the process of pasting of labels and packing had to be done manually for the semi-mechanised units to claim the reduced duty of 6 per cent. “Otherwise, we are being levied 12 per cent duty treating us as fully mechanised units,” the secretary of All India Chamber of Matches, A. Ramesh Prabhu, said.
He said that the present concessions were not new to the sector, but has only been reintroduced after snatching it a couple of years back. “This is not going to benefit the organised sector to a great extent in terms of economics. For, the process of pasting labels on the matches has been done away with after we turned to cardboards for making the boxes instead of veneer boxes (which required pasting of labels),” he said.
The only benefit the industry could enjoy is in packing that too because of shortage in manpower.
One of the leading matches manufacturers G. Athipathy said, “The two concessions extended to us now is what we asked for two years back. Now, we want the exemption of duty to so-called hand-made matches units to be removed. But, that has not been addressed,” he said.
Mr. Prabhu said that the unorganised sector was thriving on evading taxes and by not meeting other statutory obligations like provident fund and Employees’ State Insurance.
“They are enjoying zero duty even as stealthily semi-mechanising the units for making matches,” he said. Stating that the unorganised sector was contributing more than 50 per cent of matches production, Mr. Prabhu wanted the Centre to exempt semi-mechanised units from excise duty as no such hand-made sector existed in reality. “We need a level playing field to take the competition from the unorganised sector,” he added. Out of the 150 units in association, only 10 are fully mechanised while remaining are semi-mechanised.
