The Federation of Tiny and Small Industries of India (Fotsii) has objected to bringing the bicycle industry under the excise net. The objection has been lodged with the joint secretary of the Tax Research Unit (TRU), Government of India. | |
| These objections were sent after the TRU joint secretary asked for suggestions from Fotsii on April 17. |
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| Speaking to Business Standard, Joginder Kumar, president of Fotsii, said the parts and accessories of cycle and cycle rickshaws were specifically exempted in 1994 by the then Union Finance Minister Manmohan Singh while presenting the Budget, and the exemptions continued till February 2002. |
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| "Parts and accessories of cycles and cycle rickshaws were brought under the excise net vide notification number 26/02 dated April 24, 2002, excise was withdrawn but nil duty was imposed. Similarly excise on bicycles was imposed on March 1, 2002 and was withdrawn on vide notification number 10.2003 dated March 1,2003.'' |
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| Kumar said the bicycle industry was very price sensitive as event he poorest used them. |
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| "It provides cheap transport to milk vendors, fruit and vegetable hawkers and factory workers among others. The excise duty on cycles and parts will increase the prices making it difficult for the poor people to buy cycles. The cycle industry is playing a pivotal and significant role in strengthening the Indian economy. It is also a major industry of Punjab and consists of a large number of units in tiny- and small-scale sector. |
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| "The industry provides employment to a large number of unskilled and illiterate youth of nearby villages. So bringing the cycle industry under the excise net will adversely effect the already recession-hit cycle industry.'' |
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| He added that the bicycle and bicycle-parts industry was fragmented, un-organised and were not professional managed. |
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| "They are incapable of maintaining complex excise records and complying with other intricate and cumbersome excise procedures and formalities. The bicycle industry pays excise duty on raw materials and fuel and cannot claim Cenvat, as there is no duty on the end product. The bicycle industry is already facing tough competition from China as the raw material there is much cheaper than in India. Cycles are also playing a very important role to keep the atmosphere pollution free besides saving the consumption of petrol." |
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| "We strongly urge the government to give more subsidies and other incentives to the cycle industry so that it may be able compete with Chinese cycles,'' said Kumar. |
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