The basic excise duty on Man made fiber (MMF) and its raw materials has been increased from 8% to 10% in the Union Budge 2010. The list of products includes, Purified Terephthalic Acid (PTA), Mono Ethylene Glycol (MEG), Polyester Staple Fiber (PSF), Viscose Staple Fiber (VSF), Partially Oriented Yarn (POY), Viscose Filament Yarn (VFY), Nylon Filament Yarn (NFY), Polyester Viscose (PV) and Paraxylene. The excise duty on non cotton apparels, non cotton woven fabric and non cotton knitted fabric has also been increased from 8% to 10%.

While the industry was expecting cut in excise duty on MMF from 8% to 4% or 0%, the government has instead increased the excise duty on man made fibers, filaments and their raw materials. However, the industry should be able to pass on this increase in duty to end customer, given the fact that there is huge gap between cost of cotton yarn and polyester yarn.

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