ICMA proposes changes in tax & duty structure

The Indian Chemical Manufacturers' Association (ICMA) is proposing changes in the tax and duty structure to facilitate growth of the chemical industry in the country.

Speaking on the sidelines of a press conference held to announce the launch of ChemSpec India 2005, Deepak Mehta, president of ICMA said, "Since the last few years, there have not been any major investments in the chemical industry in the country. In fact, there has been no growth in the employee numbers as well. Companies are actually downsizing to remain competitive in this field."

"We are, therefore, asking the government to encourage investments and make this industry lucrative by reducing the import duties on fuels to zero per cent. At present, the duties range from 10 per cent to 20 per cent for different kinds of fuels," Mehta said."This is necessary to ensure a level-playing field for Indian chemical companies as compared to their counterparts across the world," he added.

"This apart, we would also like the government to remove the minimum alternate tax (MAT) for chemical-based companies," Mehta said.

"Earlier, the government used to give tax breaks for investment in this sector. It, however, decided later that a minimum percentage of tax on turnover needs to be charged. We would, nevertheless, request the government to remove MAT so that the chemical industry becomes an attractive investment option," Mehta said.

The $28-billion chemical industry in India today contributes seven per cent of the GDP and 10 per cent of overall exports of the country. Around 20 per cent of India's excise and import duties are contributed by the chemical industry. "The world chemical industry is worth $ 1.5 trillion and India's share to global business in this sector is less than one per cent," Mehta said.

ChemSpec India 2005, the two-day exhibition on fine and speciality chemicals to be held from February 23-24, will have around 210 exhibitors (40 from China, 20 from Europe and the US and the rest from India). The exhibition is being organised by DMG World Media (UK), publishers of Speciality Chemicals, in association with Chemical Weekly, a news magazine, and Services International, an event manager.

The promoters are planning to make it an annual event and are looking at Mumbai as their next destination followed by Hyderabad again.