SURAT: Decrease in excise duty from 16 per cent to eight per cent may have pleased the textile industry, but polyester yarn (POY) manufacturers in Surat do not think it will help them weave a brighter future. Nakib Noorani of Arfees Industries Limited, said here on March 03.
Manufacturers say while excise duty on polyester yarn (POY) has been reduced from 16 per cent to eight per cent, the duty on polyester chips is still 16 per cent.
To discuss the budget proposals, the Small and Medium Scale POY Manufacturers’ Association had convened a meeting on March 01.
Their unanimous demand is that excise duty on polyester chips be reduced to eight per cent and that customs duty on the chips be not more than 10 per cent.
Moreover, the import duty on POY is now 25.45 per cent while that on polyester chips — which are processed further to make the yarn — has been increased from 34.33 to 36.73 per cent. Instead of benefiting, the POY manufacturers are going to find it tough to survive in the market; said Nakib Noorani.
By making the duty on the raw material higher than that of the finished product, the Finance Minister has opened the door for foreign players. The imported yarn will be much cheaper than the one locally manufactured. The move will cripple our market; said Shyam Gupta of Gupta Industries Limited.
President of the Small and Medium Scale POY Manufacturers’ Association Madhav Bhaderia asked if a local trader imports POY from China, he would pay 25.45 per cent custom duty. Whereas, we would have to first import polyester chips, at the higher 36.73 per cent, process it and sell it in the market with costs climbing all the way. Why wouldn’t a trader be tempted to import the cheaper foreign-made POY than buy it from local manufacturers?”
Around 25 POY manufacturers from Gujarat are likely to participate in the All India POY Manufacturers’ meeting to be held at Mumbai.They will also make a presentation to the FM.