BUSINESS

Textile units seek excise duty cut on synthetic fibre

In a move to boost use of synthetic fibre, the textile industry has sought excise duty reduction on all manmade fibre and filament to 6 per cent from the existing 12 per cent.

In a pre-budget memorandum, the Confederation of Indian Textile Industry has suggested that the government should reduce the excise duty and to cover the revenue loss, it should introduce two per cent mandatory excise duty on all value added products that are manmade fibre-based.

Globally, manmade fibre accounts for 70 per cent of the fibre consumption. However, in India, it is less than 30 per cent.

The duty reduction on raw materials such as PTA (purified terephthalic acid) and MEG (mono ethylene glycol) should follow as a logical sequence to avoid an inverted duty structure.

According to the memorandum, in India, the per capita consumption of manmade fibre is nearly three kg as against the world per capita consumption of 8 kg.

Reduction in excise duty in manmade fibre will lead to increase in demand.

The excise duty on synthetic fibre should be six per cent.

The customs duty on PTA and MEG should be brought down to zero per cent and the customs duty on polyester fibre and filament should be increased to 10 per cent, according to the memorandum.

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