Coimbatore, Feb 20 : In what could be perceived as a statement with wide ramifications, the Southern India Mills' Association (Sima) has alleged that the domestic spinning industry has evaded excise duty amounting Rs 700 crore in the year 1999-2000. In a release issued here on Tuesday, Sima Chairman, Mr Manikam Ramaswami, said the excise revenue to the government should have been Rs 1237.40 crore for the year and not Rs 533.38 crore which was actually collected.In an effort to avoid another extension of the excise exemption in the sector, the Sima chairman has said 58 per cent of the yarn producers under the excise net are evading the duty to remain cost competitive in the market.``The excise collection was Rs 573.62 crore during 1995-'96 even with a duty of just 4 per cent on cotton yarn. Moreover, the production during that year was lower by 15 per cent compared to 1999-2000,'' he stated.
To support his statement on evasion, Ramaswami claimed that excisable production of cotton yarn for 1999-2000 was Rs 13,450 crore without taking into account any of the exempted categories valued at Rs 10,800 crore. Cotton yarn production during 1999-2000 stood at 2,204 million kgs valued at Rs 24,250 crore considering an average value of Rs 110 per kg. Out of this, hank yarn 350 million kgs (valued at Rs 3,500 crore), yarn exported (532 million kgs valued at Rs.6,000 crore) and SSI yarn (valued at Rs 1,300 crore) are exempt from excise duty. The excise levy is 9.20 per cent at present.
Ramaswami attributed the evasion to high level excise duty and exemption granted to SSI sector. This had forced spinning mills to resort to duty evasion, he added.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
