Budget leaves box manufacturers at sea

The Union budget, this year, has put the corrugated box industry in deep waters.

According to industry representative bodies like the Eastern India Corrugated Box Manufacturers' Association (EICBMA), the corrugated box industry still attracts the highest rate of excise duty at 14 per cent, though the excise duty on the basic raw material "" kraft paper has been reduced to 8 per cent from 12 per cent.

Moreover, the paper mills, which were earlier paying 8 per cent excise duty on the first 3,500 mt, will now be clearing material at no rate, thereby pushing the corrugated box industry, which is an intermediate product for the end-user industry, to become more expensive and defying the central value-added tax chain.

Most users of corrugated box are the tea, biscuits, edible oil, liquor, cigarettes, defence, dairy products, agriculture produce, among other, who are outside the ambit of excise duty.

According to Hemant Saraogi, president of EICBMA, "Cost of corrugated box is set to increase substantially which will lead to overall increase in the final delivery of goods to the end-users thereby adding to the inflation basket."

The excise duty on corrugated box should not exceed the excise duty on kraft paper (eight per cent), pointed out Saraogi.

"Corrugated packaging being eco-friendly, recyclable, and the only material to replace wood, requires a more rational treatment from the finance minister," said Saraogi.