Silk weavers seek duty cut in manmade yarns

The Federation of Indian Art Silk Weaving Industry (FIASWI) has sought various duty cuts on man-made filament yarn, fibre and fabric from the Union government.

"Man-made filament yarn such as polyester filament yarn (PFY), nylon filament yarn (NFY) and viscose filament yarn (VFY), are the main raw material of synthetic powerlooms in the decentralised sector. The Cenvat duty on PFY is 24 per cent, while for NFY and VFY, it is 16 per cent each. High duty on man-made filament yarn has greatly hindered the growth of powerlooms," a federation member said.

"While Cenvat duty on man-made fibre is 16 per cent, at the same time the Cenvat duty on imported fabric is just 8 per cent. Due to high duty, the indigenously produced fabrics do not have a level playing field against imported fabrics. Keeping in mind the post WTO era, the government should reduce the duty on man-made filament yarn and fibres to 8 per cent," he said. The federation has also sought reduction of Customs duty on man-made fibre and filament yarn.

"Customs duty on man-made fibre and filament yarn is 20 per cent. The duty on fabrics was reduced to 20 per cent from 25 per cent in January 2004, whereas the duty on man-made fibre and filament yarn remains at 20 per cent. Thus, the duty on the raw material and the finished product are the same, which is unwarranted," he said.

"For the industry to compete with the rest of the world when quota regime is removed from 2005, it should be able to get raw materials at international prices. For this the Customs duty on man-made fibre and filament yarn should be brought down from 20 per cent to 10 per cent," he said.

The federation has also sought removal of anti dumping duty on partially oriented yarn (POY).

"The anti dumping duty on POY for import from Indonesia, Taiwan, Thailand, Turkey, Malaysia and Korea, has been continued even after three years. This gives a cushion to indigenous manufacturers of filament yarn to keep the prices high. These manufacturers also resort to frequent increases resulting in price fluctuation. There is no stability in prices, which adversely affects the yarn processing and weaving sectors. To check this, the government should abolish the anti dumping on POY," the federation member said.

It has also sought reduction of Customs duty on all man-made fibre and filament yarn which are not manufactured in India.

"The Customs duty on all specialty yarns, which are not manufactured in the country, is the same as that of the other yarns, which are manufactured in India. This is unjust and will discourage development of new fabrics. Import of fabrics manufactured from these yarns has very low customs duty, the yarns and fibres which are not manufactured in the country, bear a high rate of customs duty of 20 per cent," he said.

"For speedy development of specialty fabrics in the country, the Customs duty on all fibre and yarn, which are not manufactured in the country, should be reduced to 5 per cent," he said.