Setting a twin objective of increasing new investment and capacity addition, government today reduced the duty on various chemicals up to 7.5 per cent.
Finance Minister Arun Jaitley in his budget speech said: "In order to encourage new investment and capacity addition in the chemicals and petrochemicals sector, I propose to reduce the basic customs duty on reformate from 10 per cent to 2.5 per cent; on ethane, propane, ethylene, propylene, butadiene and ortho-xylene from 5 per cent to 2.5 per cent."
Besides these chemicals, the Finance Minister also proposed to reduce basic customs duty on methyl alcohol and denatured ethyl alcohol from 7.5 per cent to 5 per cent; and on crude naphthalene from 10 per cent to 5 per cent.
Welcoming the government's move Tata Chemicals Managing Director R Mukundan said," The Finance Minister has balanced expectations by ensuring that the fiscal deficit is curbed, a major fillip is given to infrastructure and stimuli is given by way of direct tax incentives."
"Reduction of taxes in chemicals and petrochemicals will encourage domestic manufacturing. Some significant announcements have been made by the government with respect to the fertilizer sector in the days preceding the budget, but in his speech the Finance Minister has promised a new urea policy.
