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Our Bureau

Mumbai , Feb. 25

THE textile engineering industry is seeking the removal of anomalies and a restructuring of fiscal levies to allow it a level-playing field in the domestic market against foreign suppliers.

Mr Sanjay Jayavarthanavelu, Co-Chairman, Federation of Indian Textile Engineering Industry, speaking at the association's award ceremony here, said the excise duty on all textile machinery, parts and accessories is now 16 per cent.

It must be lowered to eight per cent and the system of two-year deferred Cenvat credit must be removed.

Besides, sales tax, Octroi, local levies, transaction cost and cost of finance have raised the cost of the finished goods by 20 per cent.

He said the recommendations of the Sathyam and other expert committees must be given serious consideration for fixing a three-tier rate of customs duty structure, which is highest for complete machines; a lower rate for intermediates including constituents of machines, components and parts and accessories; and lowest on all raw materials.

The countervailing duties on these imports must be eight per cent. These must be brought down in a phased manner so that indigenous machine manufacturers could adjust to the reductions.

Mr Jayavarthanavelu also said that with the withdrawal of Special Additional Duty, as many as 54 machines, including used ones, could be imported at five per cent total import duty without any export obligation, while import of capital goods under EPCG (Export Promotion Capital Goods) scheme were allowed at the same rate of duty with export obligation.

This indicates discrimination in duty structure and he urged that all inputs be imported at the same rate of duty applicable to specified items of textile machinery.

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