Punjab's Textile upset over 8% central excise duty on manmade fibre, yarn

Punjab's textile industry today was disappointed over the imposition of central excise duty of eight per cent on manmade fibre and yarn announced by Union Finance Minister Pranab Mukherjee in the budget 2009-10 and further said that it would push up the yarn prices by at least 8 per cent.

"The levy of 8 per cent of excise duty on manmade fibre and yarn is going to hurt the industry which is already in doldrums due to slowdown impact," Vardhman Textiles Limited, Chairman S P Oswal told PTI here today.

Stating that the industry was expecting some sort of stimulus package in the budget to invigorate the sector in the wake of slackening demand, Oswal said that the duty element would now further aggravate the problems for the textile segment.

"The prices of manmade fibre and yarn will certainly move up in view of levy  of excise duty," he said.

Manmade fibre is major raw material for the textile industry for producing acrylic yarn, polyester, nylon yarn etc and globally manmade yarn constitutes 60 per cent of total textile consumption," he said.

Budget 2009-10 has proposed to restore the rate of 8 per cent Central Excise duty on manmade fibre and yarn on mandatory basis. Echoing similar views, Ajit Lakra, Managing Director, Superfine Knitters also said the budget was not up to the expectation of the industry. "It (budget) completely lacks growth oriented policies for the textile sector and the imposition of excise duty will hit the industry hard," he said.

He said that the textile sector was looking for help from the centre in the shape of stimulus package so as to put the industry on the track. "But I think the budget completely ignores the problems of the industry for  redressal," he said.

However, the industry hailed the move of the centre for abolishing of Fringe Benefit Tax (FBT) and extension of 2 per cent interest subvention beyond September till March 31, 2010.