Duties reduced: budget cheers plastics industry

01-Mar-06

The Union Budget for 2006-07, presented by finance minister P Chidambram, has been welcomed by the plastics and chemicals industry for the announcement of reduction in duty in various products. The plastics industry welcomed the decision to reduce the duty: * on PVC, PE and PP from 10% to 5% * on naphtha for plastics to nil * on styrene, EDC and VCM to 2% * on packaging machines from 15% to 5% The budget has also proposed reduction of: * excise duty on all man-made fibre yarn and filament yarn from 16% to 8% * import duty on all man-made fibres and yarns from 15% to 10% * import duty on raw materials such as DMT, PTA and MEG from 15% to 10% * import duty on paraxylene to 2% Duty reduction on basic inorganic chemicals has been reduced from 15 % to 10%, on basic cycle and acyclic hydrocarbons and their derivatives to 5%, and on catalysts from 10 % to 7.5%. However, the budget was a major disappointment for the oil and gas sector as it has nothing to offer to the oil and gas sector, where the state-owned oil companies are bleeding on account of sharing the subsidy burden. Mr Chidambaram failed to announce anything for the hike in the retail petroleum products, which was awaited by the petroleum companies on the recommendations of the Rangarajan Committee. A concessional project rate of 10% is to be extended to pipeline projects for transportation of natural gas, crude petroleum and petroleum products, that will be of great help to the companies like Reliance Industries Limited (RIL), GAIL India Ltd and Gujarat State Petronet Ltd (GSPL).