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Valve and cock units in Punjab hit rough patch

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Vijay C Roy New Delhi/ Jalandhar
Last Updated : Feb 06 2013 | 6:31 AM IST
Valve and cock units of Jalandhar, generating a business of Rs 450 crore, are in the doldrums. And, here too, the China factor is at work.
 
In the past one year around 10 units have downed shutters. The market is flooded with cheap Chinese valves and cocks.
 
Apart from this, high import duties, excise duties, and octroi and high freight rates are also affecting the industry. Also, the 4 per cent VAT on valves and 12.5 per cent on cocks is affecting there sales. About 300-350 units, mostly in SSI sector are engaged in manufacturing of valves and cocks.
 
Talking to Business Standard, All India Valves & Cocks President S P Sharma said, "At present, the Chinese products are posing a big threat to Indian manufacturers. Although India and China both import raw material like brass and gun metal from European countries, but their government provides them the raw material at subsidised rates. But the same thing does not apply to us. We have to shell out hefty sums towards import duty, currently 15 per cent, central excise that is 16 per cent, 2 per cent towards octroi and again 2 per cent towards freight charges. So, the cost of raw material increases by almost 35 per cent, thus making it difficult for us to survive in domestic and international markets."
 
He said, "Secondly, there is hire and fire rule in China, which means you can hire the manpower when you need, and suspend their services when u don't need. But in India, the labour laws are so stringent, that one cant think of doing that."
 
In the past one year, the cost of raw material has doubled. Commenting upon the surge in prices of raw material, Manohar Dhanoa, an industrialist and also immediate past President of All India Valves and Cocks said, "The high import duty on raw material makes the input cost higher."
 
He further said for example in last year, the price of gun metal has risen from Rs 95 to Rs 220-230 per kg.
 
He said, "The announced freight subsidy by the state government has not been disbursed yet. The government had announced this subsidy so that the manufacturers here can get the raw material at the same price as the states which are near to the sea ports."
 
Earlier, both (valves and cocks) had 12.5 per cent VAT. However, after receiving representation from the traders and industrialists, the VAT Empowered Committee put valves under 4 per cent VAT while cocks are still under 12.5 per cent VAT.
 
The industrialists are demanding that valves meant for industrial use be taxed at 4 per cent and those for domestic use have 12.5 per cent VAT.

 
 

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First Published: Mar 14 2006 | 12:00 AM IST

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