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Anna Peter

MUMBAI, Jan. 10

SYNTHETIC and rayon yarn exporters are unhappy that the Government continues to levy a special additional duty (SAD) of 4 per cent on imports and is not refunding the same under the DEPB scheme.

According to the Executive Director of Synthetic and Rayon Textiles Export Promotion Council (SRTEPC), Mr Anil Bamba, the SAD made exports uncompetitive. He said last year the industry had maintained exports despite stagnant growth.

The 2002-03 target was Rs 7,250 crore and the proportionate target for April-August 2002 was Rs 3,021 crore. The export performance achieved in April-August 2002 was up to Rs 2,794.54 crore from Rs 2,139.54 crore in the corresponding previous period. Exports in April-August 2002 were up 30.50 per cent to Rs 2,722.42 crore from Rs 2,086.09 crore in the corresponding previous period.

According to Mr Bamba, in the Finance Act 2002-03, a SAD of 4 per cent had been imposed on imports. This meant that when the exporter approached the Government for refunds on DEPB, only the excise and customs components were refunded. Synthetic and rayon textile exporters claim that not refunding the cess made their exports uncompetitive by raising product prices.

Mr Bamba added that part of the problem was due to the lack of co-ordination between the revenue department and the Ministry of Commerce. The Ministry issued policies and the revenue department had to issue notifications to the effect.

However, he said, the revenue department also had to boost earnings and sometimes did not issue notifications because it would mean giving numerous refunds. What the exporters wanted, Mr Bamba said, was a clear-cut policy.

Issues such as poor infrastructure, high electricity cost, a stronger rupee — where imports would be cheaper, but exports more expensive — would need to be tackled. For example, Mr Bamba said, at Rs 65 per dollar, Pakistan's exports would be cheaper and, thus, more competitive.

The SRTEPC is hoping that among other things, the Government will reduce excise duty from 18.40 per cent to 9.20 per cent on SF/PSF/Acrylic Fibre in Budget 2003-04.

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