06 July 2009 16:28 [Source: ICIS news]
NEW DELHI (ICIS news)--India has revised excise and customs duties for various chemical and non-chemical products with immediate effect, according to the government’s 2009-2010 budget that was unveiled on Monday.
The government doubled the excise duty on domestically produced synthetic fibres, yarns and their intermediates to 8%, a government official said.
Presenting the budget to parliament, Finance Minister Pranab Mukherjee spoke of a major change to ?xml:namespace>
Mukherjee said: “The government intends to move towards a nutrient-based subsidy regime instead of the current product pricing regime.”
The budget also incorporated general changes in service and income taxes, which would impact the chemicals sector as well as others.
The excise duty on polyester intermediates purified terephthalic acid (PTA), dimethyl terephthalate (DMT), polyester chips and the acrylic fibre intermediate acrylonitrile (ACN) has been increased to 8% from 4%.
In addition, the 8% excise duty applied to all textiles manufactured from synthetic fibres and yarns.
An official announcement said there would be no change in the existing excise duty applicable to nylon fishnet twine and nylon tyre cord fabrics.
“There is no change in the overall rate structure of customs duties”, except for a few specific revisions, according to the government announcement.
The government, however, waived the excise duty on ethylene vinyl acetate copolymers (EVA).
The customs duty on biodiesel was reduced to 2.5% from 7.5%, according to the budget.
The government also exempted the excise duty on diesel blends containing 80% or more of high-speed diesel and up to 20% of biodiesel in an effort to support biofuels, it said.
The excise duty on naphtha used for the production of petrochemicals was reduced to 14% from 16%.
The budget also tightened the existing excise duty waiver on naphtha used to produce fertilizer by stipulating that the waiver would not be applicable if fertilizers were used for non-agriculture applications and if ammonia were to be used to produce chemicals.
The customs duty on rock phosphate, the phosphoric acid feedstock, was lowered to 2% from 5%.
“The unshackling of the fertilizer manufacturing sector is expected to attract fresh investments in this sector,” he said.
“In due course, it is also intended to move to a system of direct transfer of subsidy to the farmers.”
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