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Our Bureau

New Delhi , Nov. 20

THE synthetic fibre industry has petitioned the Government seeking a 4 per cent common Cenvat rate on all types of textile fibres, with an option to stay in the Cenvat chain or not.

According to the synthetic fibre and fibre intermediates industry's pre-budget memorandum for the Union Budget 2006-07, the mandatory 16 per cent duty at the fibre and filament yarn stage imposed on the synthetic textile sector has resulted in "the problem of Cenvat accumulation at the blended yarn stage." This, according to the memorandum, has eroded the profitability and working capital of the spinning industry and eroded its ability to generate reinvestable surplus for further expansion.

The Memorandum has said the National Textile Policy of 1985 and New Textile Policy in 2001 had focussed on "fuller fibre flexibility," which meant that there should be no restriction for usage of any fibre by any segment of the industry.

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