Fibre industry demands 8% excise duty on viscose filament yarn

Mumbai, February 9: | Updated: Feb 11 2002, 05:30am hrs
The Association of Man-Made Fibre Industry of India, on behalf of viscose filament yarn (VFY) industry, in its pre-Budget memorandum has urged the government that the basic excise duty on VFY should be maintained at 8 per cent i.e. at the same level as cotton yarn, since VFY is also essentially a natural cellulosic.

The association said that with the phasing of Janata Cloth Scheme, there is no justification for continuing levy of additional duty of excise on textiles and textile articles at the rate of 15 per cent of the basic excise duty. This duty should be abolished as it has lost relevance.

At present, the waste of viscose filament yarn attracts the same rate of excise duty as for good yarn. The association said that this is not fair and that the basic excise duty on waste of VFY should be kept at 4 per cent.

Customs duty on rayon grade wood pulp should be totally waived as these are imported due to non-availability in our country. The import of pulp would also reduce the burden on our own dwindling forest reserves.

The association has urged that there is an urgent need to implement the recommendations of the expert committee on textile policy set up by the government. The expert panel had recommended that the availability of wood pulp may be augmented further liberalising the import policy of rayon grade wood pulp.

It also suggested improving the availability of indigenous rayon grade wood pulp. The panel said that the government should permit raising plantation of eucalyptus, which is most suitable for rayon grade wood pulp, on unproductive marginal or submarginal lands through farm forestry route. The committee also recommended to improve the consumption of cellulosic yarns and that the excise duty on such fibres be further reduced and brought at par with cotton yarn.

It added that to facilitate technology upgradation in the cellulosic sector, the fiscal policy of machinery required for manufacture of cellulosic yarns and fibres needs to be further liberalised.