Imposition of excise duty on utensils has not augured well for the utensil manufacturers in the region, with the industry being befuddled over the decision.
Federation of All India Aluminium Utensil manufacturers President Bharat Garg maintained, levying of 1 per cent Excise duty on aluminium has left the industry confused.
In the Union budget 2011-12, of the 370 items which were exempted from Central Excise Duty but chargeable to Value Added Tax, 130 items have been brought under 1 per cent Excise duty.
Representatives from the aluminium utensil industry are not impressed with inclusion of utensils under the Excise ambit.
Garg said, earlier the compounding levy scheme was followed in utensil manufacturing whereby fixed amount (depending on number of machines installed) were being charged upon. Now with the 1 per cent Excise duty imposed, it has led to further chaos.
“The imposition of Excise duty suggests exemption up to 15 million of sales are allowed for in the industry but with the compounding levy scheme also in place, this would lead to further chaos with regards to how the utensil industry could claim the benefits.”
Members of Aluminium Utensil Manufacturing Association Jagadhri (Haryana) also maintained, while 370 items as mentioned in the budget speech are taxable under VAT, prejudice should not have been done with select items.
Aluminium Utensil Manufacturing Association member Tarun Goyal maintained the imposition of 1 per cent Excise duty on utensils was certainly an unfortunate decision. He added since utensils also come under the necessity category, due care ought to be taken to exempt the item from Excise. The imposition of Excise duty would have a definite impact on the prices of utensils as well, which are likely to firm up in the long run.
Goyal demanded that since utensils are necessary, the 1 per cent Excise duty should be removed from the utensils.
