The Hindu : Tamil Nadu / Madurai News : `Restore excise duty on viscose filament yarn to 12 per cent'

Online edition of India's National Newspaper
Friday, Jul 16, 2004

Tamil Nadu

Tamil Nadu - Madurai

`Restore excise duty on viscose filament yarn to 12 per cent'

By Our Staff Reporter

MADURAI, JULY 15. The Madurai Kaithari Javuli Urpathiyalargal Sangam has urged the Centre to safeguard the interest of the handloom industry by restoring the excise duty on viscose filament yarn to the earlier rate of 12 per cent.

There was an urgent need for the Centre to restore the excise duty as the livelihood of more than two lakh people belonging to the below-poverty- line category, who were dependent on this traditional industry was at stake. Already they were struggling hard to sustain their hand-to-mouth living and the enhancement of the duty would add to their cup of woes, the association said.

The weavers in Madurai, Paramakudi, Emaneswaram, Dindigul, Aruppukottai, Chinnalapatti, Ramanathapuram, Tirunelveli, Kottar and other parts in the southern districts of Tamil Nadu, produce finer varieties of handloom sarees with cotton yarn - viscose filament yarn blended type. These weavers use more than 60 per cent viscose filament yarn as main raw material (warp) and the remaining cotton yarn as weft.

The technology-advanced polyester filament yarn industry has been posing a serious threat to the survival of viscose filament yarn industry and their users. In the budget, the Union Finance Minister, P. Chidambaram, had proposed to raise the excise duty for viscose filament yarn from 12 per cent to 16 per cent. With the proposed educational cess of two per cent and withdrawal of additional excise duty the net increase in excise duty worked out to 2.52 per cent. That is, the prices of viscose filament yarn were expected to go up to around Rs.5 per kg.

On the other hand, the budget has proposed to scale down the excise duty on polyester filament yarn by 3.12 per cent but upon the withdrawal of additional excise duty, the polyester filament yarn, which used to attract 27.6 per cent duty before the budget presentation, would attract an excise duty of 24.48 including the proposed educational cess now. That is, the price of polyester filament yarn would go down by Rs.6 per kg.

Owing to increase in the price of viscose filament yarn, finer varieties in handloom industry get affected and the industry would not be in a position to compete with the powerloom industry and mills sector. This would throw the handloom weavers out of the job to face starvation, the association said.

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