Date:04/02/2006 URL: http://www.thehindubusinessline.com/2006/02/04/stories/2006020400360300.htm

Back IPMA seeks uniform excise duty of 8 pc

Our Bureau

Hyderabad , Feb. 3

THE Indian Paper Manufacturers Association (IPMA) has urged the Union Finance Ministry to rationalise the excise duty structure and introduce a uniform excise duty of eight per cent in the ensuing Budget.

In a pre-Budget memorandum, the IPMA, representing paper units with a size of 60 lakh tonnes of annual production and Rs 17,000 crore of turnover, has called for immediately disbanding the existing multi-tier excise structure, which it felt, hindered the growth of the paper industry.

Addressing newspersons here on Friday, the IPMA President, Mr Rajeev R. Vederah, said there was no uniform excise duty at present for the Indian paper industry and the duty varied from zero to 16 per cent.

He said the association had asked the Government to de-link the excise duty from type of raw material used for paper production.

Stating that the country was already a part of the WTO and had signed various free trade agreements and regional trade agreements, he said the domestic paper industry needed enablers for a level playing field to effectively compete with imports.

Retain 15 per cent customs duty: Accordingly, it urged the Government to retain the existing basic customs duty of 15 per cent for few more years.

"Any further reduction in import tariffs in the short-term would be detrimental to the health of the Indian paper industry. Therefore, it is essential that the current basic customs duty is maintained till enabling policies required to help the domestic industry are put in place," Mr Vederah, who is also the Joint Managing Director of Ballarpur Industries Ltd (BILT), said.

According to the IPMA Vice-President, Mr Pradeep Dhobale, who is also the Divisional Chief Executive of ITC Ltd, raw material accounts for up to 50 per cent of paper production costs and the paper industry was facing a serious raw material crunch, resulting in significant dependence on imports and huge forex outgo. The industry needs enablers from the Government to develop an indigenous raw material base and also generate employment by facilitating farm forestry on a bigger scale.

"This can only happen when a paradigm shift from `conservation-centred' management to `production-centred' management of forests at the policy level. The paper industry needs 1.2-1.5-million hectares of plantation area, which is only three per cent of the country's total degraded forestland. Development of approximately 1.2-million hectares would not only bridge the shortfall of critical raw material, but also results in the creation of around 3.65-lakh jobs annually," Mr Dhobale said.

The IPMA Secretary-General, Mr R. Narayan Moorthy, has urged the Government to provide technology upgradation fund at par with the textile industry to overcome technological obsolescence and meet emerging domestic and global challenges.