Financial Daily from THE HINDU group of publications
Thursday, Jan 23, 2003

News
Features
Stocks
Port Info
Archives

Group Sites

Industry & Economy - Textile Machinery


Textile machinery units seek changes in duties

Our Bureau

The industry, in a pre-Budget presentation, has asked for an 8 per cent excise duty rate for all textile machinery, including raw materials, components and accessories which can lead to zero per cent over the next 2-3 years.

COIMBATORE, Jan. 22

THE textile engineering industry wants the Centre to end anomalies in the levy of excise, customs and sales tax relating to textile machinery.

This, it feels, should be done by evolving a unified system that allows the end-users to invest in modernisation and peps demand for indigenous machinery manufacturers.

In the case of customs duty, it should be 10 per cent lower on imported raw material, intermediary and components/parts that go into manufacture than the duty applicable to finished products to provide a level playing field to the domestic industry and the overseas machinery makers.

The Federation of Indian Textile Engineering Industry (FITEI) representing domestic textile machinery manufacturers, has pointed out that the current excise duty rate at 16 per cent on machinery, parts and accessories has proved exorbitant for the capital goods. Further, the system of two-year deferred cenvat credit has blocked substantial working capital.

In addition, the inputs of as many as 44 textile machinery offered excise duty exemption as per the notification (No.6/2002) dt March 1, 2002, are not eligible for the Cenvat credit. This makes the cost of machines quite high for the small- and medium-scale units seeking modernisation of their plants. Hence, the suggestion to bring down the excise to zero.

Wherever the excise duty is made zero at present, similar concession should be extended to the inputs including the raw materials, parts and accessories. To make good the higher initial outflow of funds for local purchase of machinery by export-oriented units and export-promotion capital goods licence holders, the FITEI has asked for excise duty exemption for the machinery supplied to the EPCG licence holders.

Pointing out the lower credit offtake under the Technology Upgradation Fund (TUF) scheme, the FITEI has recommended increasing the interest rebate eligible under the scheme from the present 5 per cent to 8 per cent. Interest rebate incentive against credit under the TUF for scrapping obsolete/dormant spindles which could be replaced with lower number of new spindles and replacing the old plain looms with new automatic/shuttleless looms without any obligation should be permitted. It also suggested that the list of machinery eligible for concessional rate of customs duty should be pruned so as to eliminate machinery which could be locally manufactured at a technology comparable to the imported ones.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Fiscal framework for 2003-04 announced — AP Budget no more under wraps


ADB to extend $8-b aid package for India
Karnataka to prepare citizens' charter
Mufti seeks investments from State
Chamber planning to form healthcare trust in N-E
Reliance to set up 2,500 retail outlets
GoM meet to review gas prices on Jan 29
CETMA meet to study VAT implications
SSI sector to focus on market promotion
`Managemantra' to help small-town students
Stringent norms for community radio services
Hebbal industrialists seek special package
FAPCCI pact with Irish chamber
Textile machinery units seek changes in duties
Aeronautical policy vital, says Kalam
Granite sector for leases in mining
The Mail on its way out
Industries told to tap WTO norms to boost exports
Karnataka plans new recruitment policy for doctors
SEZs planned for hardware sector
Engineering goods fair
NRI gesture for alma mater
Wheat exports to Iraq to resume
`Herbal treatment must supplement primary care'


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line