'Streamline Tax On Alcohol'

The alcohol-based chemical industry has urged the Union government to remove multiple tax structure on alcohol and to make prices uniform so as to be competent in the global market.

The industry has pointed out that the tax structure varies from state to state where the basic feedstock also attracts tax anywhere between 15 paise and Rs 2 per litre. Besides, it also attracts tax from the excise and prohibition department.

"This results in our products being priced higher, rendering them uncompetitive in the global market," an alcohol-based chemical manufacturer said.

Not only multiple taxes, the cost of molasses and alcohol also varies from state to state. In case of molasses, the price ranges from Rs 800 to Rs 2,000 per tonne while alcohol is available anywhere between Rs 8 and Rs 16 per kilolitre.

 

"There is no uniformity in the pricing which makes the growth sluggish and the product becomes non-competitive," sources said.

They pointed out that the government should take a view as the industry has already invested Rs 3,000 crore in the country and provides employment to over 1 lakh people.

Chemical manufacturers indicated that the industry could not compete globally due to high input costs.

"Fuel (power) in India is costlier by 150 per cent that is Rs 4 per unit against Rs 1.50. The same is the case with water which is made available to industry," sources said.

The industry is of the opinion that the government should stick to the Supreme Court judgement of 1977, where it allowed the pricing of Industrial alcohol to be under the purview of the Central government and allocation of both the raw materials (molasses and alcohol) should be uniform all over the country.

The industry has also urged the government to allow 70 per cent of the alcohol for industrial purposes and 30 per cent for drinking.