A silver lining

SPECIAL REPORT

lyester staple fibre (PSF) players like Indo Rama, JBF Industries, Garden Silk Industries, Century Enka and smaller players like Sanghi Polyester are a happy lot. Last month, the government agreed to their request and reduced excise duties on key raw materials (fibre intermediates).  The duty on purified terephthalic acid (PTA)/di-methyl terephthalate (DMT) has been slashed from 16 per cent to 8 per cent, while the same on mono-ethylene glycol (MEG) is down from 16 to 12 per cent. 
 

EXCISE CUT...
Excise duty (%)	Budget 2006-07	Modified
POY/PSF	8	8
PTA	16	8
DMT	16	8
MEG	16	12

 Their prices have gone up by over 15 per cent and 10 per cent respectively since last three months. Duty on polyester chips has also been reduced from 16 to 8 per cent.  According to Crisil Research, this is expected to lead to a reduction of excise duty of Rs 100-120 crore (8 per cent decline). But reactions from industry players to passing on the benefits and reducing prices of final products like POY/PSF are mixed.  Says O P Lohia, chairman and managing director, Indo Rama Synthetics,