Mumbai, March 28: The textiles industry seems to be divided on the issue of ad valorem duty. While the composite mills have welcomed the finance minister's move to increase the ad valorem duty to 16 per cent from the earlier 12 per cent. textile processors, enjoying only the stenter duty before the Budget, want the new levy to be removed altogether and retain the earlier stenter duty. Announcing the Budget last month, the finance minister had announced the levy of 16 per cent ad valorem duty on the branded goods. Since then, this levy has raised a storm of protests from the industry leading closures, bandhs and various representations to the Union government .
The government, showing sympathy to the industry's representations, has assured to relook into the matter. It is this assurance that the textiles industry is relying on. The Federation of All India Textile Manufacturers Association (Faitma), in its new set of demands, has proposed for the removal of the 16-per cent ad valorem duty and the restoration of the earlier stenter duty. The calculation of the value of fabrics processed, however, continues to be the main hurdle in the calculation of the stenter duty.
They feel that the textiles processors' objection to the ad valorem duty is baseless as the levy of duty would be based on the production capacity which will offer a level-playing field with no scope for manipulation in the excise duty structure.
Lastly, since the textiles processors have not bothered to pass on the benefits to end-consumers for years, it is necessary that the industry now pay up the dues to the government.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
