Alcohol industry expects duty cut

BUDGET WISHLIST

The alcohol and distillery industry has made a pitch for reduced excise duty on ethanol, which is blended with petrol, in the forthcoming Union budget.

Shashank Inamdar, joint managing director of distillery equipment manufacturer Praj Industries told Business Standard, "When it comes to alcohol and distillery industry there are two major things that we expect from the government. First is that we seek fiscal support from central government in terms of use of ethanol blended with petrol. Initially, such support was there. The government used to offer a reduction in excise duty of about 30 paise per litre."

He said that the reduction has not been renewed for many years. Inamdar said that an announcement of a similar kind of fiscal support from the government in the forthcoming Union budget for the year 2006-07 was expected.

Inamdar added that the industry is also expecting reduction in overall import tariffs so as to bring them to a uniform level. Right now, the import tariff ranges between 10 and 25 per cent.

The alcohol and ethanol players' are expecting uniformity in this tariff and also expect the budget to come up with a fixed rate of say 10 or 15 per cent.

"Rising sugar prices will not affect the forthcoming ethanol projects. Globally, there is a view that there are good incentives in investing in sugar production. The budget should also come up with an announcement giving more incentives and perks for sugarcane farmers," Inamdar mentioned.