Feedstocks such as ethylene, ethylene dichloride (EDC) and vinyl chlorine monomer (VCM) required for manufacture of PVC by the Indian industry are predominantly imported to the extent of about 80 per cent of the Indian requirement. The feedstocks are not traded commodities, so a four per cent special additional duty (to protect local industry) has no relevance here.

S Subramanian, secretary of the PVC Resin Manufacturers' Association said that the industry was in fact hoping that the gap would be widened between prices of feedstock and the final PVC product. This could be done very fairly without compromising any industry's interest by reducing duties on feedstock (ethyleneto nil) and EDC and VCM to five per cent.

For the past two years, import duty on polymers, especially PVC has been maintained at 30 per cent with an additional import duty of five per cent, along with special additional duty of four per cent.

However on the feedstocks, the duty has been maintained at 15 per cent including five per cent additional import duty and now a special additional duty of four per cent. And the PVC resin industry which was expecting some sops here was disappointed.

On the other hand, traders have a considerable advantage in being exempted from the four per cent SAD. Though they are not likely to import the feedstock and sell it in the open market, the same is not the case with the end product PVC - and cheap imports are coming in. Of course traders have to pay other taxes (CST, turnover tax etc), which manufacturers also have to pay if they sell. Traders, on the other hand, have the advantage of getting their margins anyway, whether from imports or local produce. There is alsorampant under invoicing of imports, squeezing the manufacturers' margins further.

Resin manufacturers feel that at least the original producer's invoice must be examined instead of that of the agent. Also that norms may be introduced to assess the actual price at the time of opening the LC based on information furnished in some recognised international publications.

Import duties on capital goods have been maintained at 25 per cent, which pushes up the cost of setting up self-generation power facilities. And, of course, power costs in the country being very high some duty incentives could be given on LSHS/furnace oil, or at least fuel could have been classified as input for generation of uninterrupted power for availing Modvat. Too, consumption of PVC products could be given a fillip by reducing excise duty to 15 per cent and all products brought under the excise net.