Federation of Indian Chambers of Commerce and Industry (FICCI) has sought a reduction in excise and customs duties in the forthcoming Budget to make Indian textile globally.
In its pre-Budget memorandum, the chamber said excise duty on input and capital goods should be reduced to 8.16 percent from the current 16.32 percent.
FICCI informed that the value addition in yarns are usually in the range of 35-40 percent over input costs, which results in unutilisation of Cenvat credit to the extent of Rs 4-6 per kg. This adds to the production cost and made spinning mills unviable.
In case of texturised mills, the current duty structure leads to accumulation of unutilised cenvat credit to the extent of Rs 1.50 per kg, it said. FICCI also observed that basic customs duty applicable on the raw materials used for manufacture of polyster products was the same as applicable on the finished product.
FICCI stated that the rate of basic customs duty on the raw materials like PTA (purified terephthalic acid) and MEG (mono ethylene glycol) was 15 percent which should be at least 10 percent less than the finished goods with the same duty.
The chamber suggested issuing guidelines for utilisation of balance in Cenvat lying idle under the heading ?dditional Duty of Excise?towards payment of basic amount of excise duty and other payments as the case may be.
FICCI observed that while the list of parts used for manufacturing machinery and goods with reference to use in fibre and yarn industry get the benefits of tax exemptions, the same are not applicable to parts imported for maintenance of these machines. Ficci sought suitable amendments in the notification to allow for maintenance of spares.
