The Indian Govt to remove excise duty on recycled polyester fiber soon (Indian)
The government of India is planning to remove excise duty on recycled polyester fiber soon to provide some relief to the manufacturer of Recycled polyester staple fiber (PSF). The exemption would be granted only if PSF was recycled from plastic waste, and not plastic. In the Union Budget 2012-13, it is declared that the excise duty rate on recycled PSF be pegged at 10 percent, in line with other textile fibers such as polyester fiber and yarns and its raw material, purified terephthelic acid and mono ethylene glycol. In fact, the Budget preferred to make the said modification with retrospective effect from June 29, 2010.
According to the proposal, duty in respect of clearances already made to be recovered from the manufacturers of these goods within a month of the date of enactment of the Finance Bill, 2012, or else it would draw an interest penalty of 24 percent. At the same time, the manufacturers are being permitted to take into account credit of duty paid on inputs, input services and capital goods.
Recycled PSF is a man-made fiber as polyester staple fiber and polyester filament yarn. This is manufactured either from plastic or plastic waste, including waste polyethylene terephthalate bottles. The Budget had proposed man-made fiber to be included in the list and taxed as textile fibers.
Recycled PSF was exempted from excise duty prior to the Budget proposal of 2012-13. When it was introduced in 2011-12, some companies had gone into legal disputes, and thus, companies did not pay excise duty pending a judgment, as a result, the government opted to come out with a retrospective amendment to implement the duty with interest penalty.
The duty structure on man-made fiber distorts, and thus, favours cotton-made or natural fiber from technical textile fiber. While polyester, viscose, nylon and polypropylene account for 70 percent of the total fiber used in technical textiles, specialty fibers of upgraded variety comprise the remaining 30 percent.
According to the proposal, duty in respect of clearances already made to be recovered from the manufacturers of these goods within a month of the date of enactment of the Finance Bill, 2012, or else it would draw an interest penalty of 24 percent. At the same time, the manufacturers are being permitted to take into account credit of duty paid on inputs, input services and capital goods.
Recycled PSF is a man-made fiber as polyester staple fiber and polyester filament yarn. This is manufactured either from plastic or plastic waste, including waste polyethylene terephthalate bottles. The Budget had proposed man-made fiber to be included in the list and taxed as textile fibers.
Recycled PSF was exempted from excise duty prior to the Budget proposal of 2012-13. When it was introduced in 2011-12, some companies had gone into legal disputes, and thus, companies did not pay excise duty pending a judgment, as a result, the government opted to come out with a retrospective amendment to implement the duty with interest penalty.
The duty structure on man-made fiber distorts, and thus, favours cotton-made or natural fiber from technical textile fiber. While polyester, viscose, nylon and polypropylene account for 70 percent of the total fiber used in technical textiles, specialty fibers of upgraded variety comprise the remaining 30 percent.
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