Ministry calls for import duty differential

New Delhi, Jan 4 | Updated: Jan 5 2006, 05:30am hrs
The chemicals and fertilisers ministry has proposed to the finance ministry that any reduction in peak rate of customs duty in the fothcoming Budget could create serious distortions in the tax structure on petrochemicals, unless the duties on feedstocks, intermediates and catalysts are correspondingly slashed.

The petrochemical value chain is a long and complex one. Duty differential is a must for ensuring competitiveness of the domestic industry. said an official. He pointed out that duty on petrochemical feedstock naphtha (10%) imported for certain end uses is higher than the duty on many intermediate goods (5%). Irrespective of end use, import duty on naphtha could be 5%, the ministry said.

The ministry also proposed unified excise duty regime for all fibres, by bringing the duty on synthetic fibres at par with that on cotton. The duty disparity is not only hampering the growth of the synthetic textile industry, but also is resulting in unutilised Cenvat credit with blended yarn industry.