Basic customs duty on PTA, MEG to halve, duties on polymers to remain unchanged in India

20-Jan-05

In order to cut the manufacturing cost of synthetic textile industry and thereby enhance its global competitiveness in the quota-free regime, the finance ministry is likely to halve the basic customs duty (BCD) on synthetic fibre intermediates : PTA, MEG and DMT and caprolactam - to 10% and cut it on fibres : PFY, POY, NFY and PSF - from 20% to 15% in the forthcoming Budget. . However, the BCD on bulk polymers: LDPE, HDPE, LLDPE, PP saw a cut from 20% to 15% in September is unlikely to be changed. The present 5% BCD on naphtha that goes into production of specified polymers is most likely to be extended to naphtha busted for other petrochemical end uses as well. In September 2004, the government had cut the BCD on naphtha (for production of olefinic derivatives) from 10% to 5%, to curb inflation. But the duty on naphtha that goes into aromatic derivatives like polyester intermediates was kept unchanged at 10%. Now the benefit of lower duty would be accorded to all processes.