Sharad Parikh, ex-president of BME in a letter to the state finance minister, Mahadeorao Shivankar, said the imposition of various levies will increase the selling price to the extent of 1.4 per cent on non-ferrous items like sheets, strips, circles, tubes, rods, extrusions, castings etc. produced by non-ferrous small scale manufacturing units in the state.

It will create considerable difficulties for non-ferrous manufacturing units bearing in mind that the industry is already in doldrums for various reasons mentioned below.

All the manufacturing units in the state face competition on two fronts due to imports of cheaper non-ferrous finished products and from the industries situated in other states where levies such as turnover tax and sales tax surcharge are not applicable.

Besides, there is lower rate of sales tax, octroi, power tariff etc. in otherstates. These are the additional advantages the units enjoy which are located outside the state.

Further, one has to take into consideration that the levies are already high as industries have to pay 4 per cent sales tax and about Rs 4.50 per unit of energy besides 2 per cent octroi in Mumbai.

Due to these levies, the cost of production has shot up and with fresh impositions of of turnover tax and sales tax surcharge, the position will deteriorate further.

Moreover with general recession prevalent all over, the demand has declined reducing the capacity utilisation by the industries to 50 per cent. Several units in small scale sector have already closed down due to high costs in Maharashtra. Users reverting to imports or purchases from outside Maharashtra has fuelled the deteriorating situation.

Maharashtra which was once a pioneer and leader in the non-ferrous semis production has lost the glory to other states due to higher levies. Local manufacturers have lost their market to manufacturers outsidethe state. Since number of units have shifted their manufacturing base to other states, unemployment has been on the rise.

Keeping all these factors in mind, the BME has urged the state finance minister to seriously consider removal of one per cent turnover tax and also 10 per cent surcharge on sales tax paid.

This will help to revive competitiveness and keep the operations smooth.

Alternatively, the government should reduce rates of sales tax to two per cent from the existing four per cent, particularly in the case of non-ferrous items as the value is very high, he suggested.

BME has also requested to seriously consider shifting of non-ferrous industry to schedule A or B where the turnover tax is not applicable. It has stated that if remedial action is not taken in time, a serious and grave situation will arise leading to closure of non-ferrous metal industry in the state.