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K.R. Srivats

NEW DELHI, March 6

FACED with the threat of re-location of units involved in manufacture of soaps and toiletries to neighbouring countries, the Finance Ministry has in-principle agreed to examine the duty anomaly that may have crept in this year's Budget on account of reduction in peak rate of customs duty to 25 per cent.

"We will certainly look into the matter," the Chairman of the Central Board of Excise & Customs (CBEC), Mr M.K. Zutshi, said here in response to submission from a FMCG major, whose representative claimed the emergence of such an anomaly after the Budget.

Industry representative claimed that the basic customs duty on industrial grade oil, a key raw material for the manufacture of soaps and toiletries, continues to be 30 per cent, even as the customs duty on finished goods have been lowered to 25 per cent. "This will kill domestic manufacturers of soaps and incentive them to re-locate their units to neighbouring countries," an industry official said.

Manufacturers of partially oriented yarn (POY) from polyester chips, however, are not very happy with the Budget even though there has been a substantial reduction in excise duty on polyester filament yarn (PFY). They claim that they continue to face a negative protection on POY manufactured from polyester chips. While basic customs duty on POY continues to be at 20 per cent, the customs duty on polyester chips are now at 25 per cent. "There has been no remedy for us in this Budget from this negative protection," an industry official said.

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Ministry to study duty anomalies on toiletries

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