The man-made fibre (MMF) industry has urged the government to extend the benefit of 2% additional interest subsidy, recently announced for textile items, to the sector.
The industry has also sought a reduction of 4% excise duty on mono-ethyleneglycol (MEG), an intermediate of synthetic fibre, from the existing 12% to 8%, as has been done in the case of cotton.
In a memorandum to the finance ministry, the industry said that the MMF sector, which enjoys a 55% share in textile fibre and yarn exports, as compared with 16% by textile items, has been excluded from the benefits and should be treated at par.
“On lowering of excise duty, the industry has argued that the intention of the government to make available fibre at a more affordable cost to spinners, texturisers and downstream users would have been ideally achieved by reducing excise duty on polyester staple fibre to 4% and thereby stimulating domestic demand and growth for both producers and the users,” industry sources said.
“For equality in excise duty on synthetics and cotton, an optional route also need to be introduced to provide level-playing field to all competing producers, both natural and man-made,” the sources added.
The industry has also sought for an amendment of central excise laws in a manner so that unutilised proportion of the duty may be reimbursed to the assessee at the earliest. Alternatively, the government can introduce an excise certification or exemption system where the manufacturer should be allowed to procure inputs without payment of duty to the extent of CENVET accumulation in the books of account, the industry suggested.
It has further requested the government that the levy of national calamity contingency duty (NCCD) be immediately abolished as continued imposition of 1% cess on certain inputs such as POY and FDY are extremely anomalous considering that other categories clubbed with this are products like tobacco, gutkha, pan masala and motor vehicles one being health hazard and other still a luxury in the country.