Finance Ministry's move to cut excise duty on intermediates such as paraxylene (PX), PTA and DMT from 16 percent to 8 percent and subsequent reduction in duty of Moethylene Glycol from 16 percent to 12 percent is to benefit many polyester firms like Indo Rama and Modern.
However, the move will not prove beneficial to Reliance Industries since it was not facing problem of unutilized credit as it produces intermediaries, Polyester Staple Fibre (PSF) and Partially Oriented Yarn (POY) on its own.
Budget saw the reduction in duties of man made fibres and filament yarns but intermediaries had been left unchanged creating the multiplicity and accumulating unusable Cenvat Credit with PSF and PFY firms, which buy raw materials from big players such as Reliance Industries and Indian Oil.
It remains to be seen if the companies pass on the benefit to their consumers.
marketing@alchempro.com
