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 DMAI/102/2014-2015                                17th November 2014


Shri Arun Jaitley

Hon.Union Minister of Finance,

Ministry of Finance,

North Block,

New Delhi-110 001.


Respected Sir,     

           Re :  BUDGET PROPOSAL FOR THE YEAR 2015-2016


We submit herewith our Proposal for the Union Budget –2015-2016






1)   General


    Presently, there is an inverse duty structure.  To give boost to exports and earn more foreign exchange, the duty structure should be as under:-


-   Zero Percent duty on all types of fuels

-  Low duty rate of 2% on basic Building Blocks like Benzene, Toluene, Xylene,      Naphthalene etc.

-   Moderate duty rate on Intermediates of 5%

-   High Duty rate on finished products of 7.5%


This will encourage our industry to export value added finished products and import only basic products of low value.


     2)  Specific


         Import Duty on Dyestuffs, Pigments & Optical Brighteners

         In order to save local dyestuffs manufacturing units, import duties on dyestuffs should be at least retained at the present levels to enable them to compete with the imported products, as high utilities like power, fuel, water etc. add to cost


We also request that GST be implemented immediately to make our products more competitive in the global market.             





Refund of Excise to Exporters

i) We also request that clear cut guidelines be laid down to complete the procedures and formalities regarding refund of excise duty to exporters within a strict time frame including provision for payment of interest on late refunds.  Any discrepancy in refund application should be verified before accepting and returned with discrepancy note, if any. This will help not only our exporters under SSI units, but also other manufacturers-exporters as well.


ii) Exemption scheme, which has provided concessional rate of 60% of the normal rate of Central Excise Duty (CED) with Cenvat credit upto clearances of Rs. 1 Crore (Notification No. 9/2003-CE), has been withdrawn. This scheme had encouraged Small Scale Units to go in for Cenvat Credit from the very first clearance and hence needs to be reinstated, which will be consistent with the Government’s avowed objective of encouraging the sector.  The slab of the first clearance value of Rs.150/- lacs may be increased to Rs.300/- lacs.  Also, for eligibility criteria, aggregate of value of Rs.4 crores in the previous financial year should be increased to Rs.5 crores.


iii) Presently, Cenvat credit of Excise Duty on chemicals used in Effluent Treatment Plant (ETP) is allowed in certain areas, whereas it is denied in some other centres without any uniformity in practice.  We suggest a uniform procedure be followed at all centres without any difference/deviation.


iv) The exemption limit for clearance of goods for home consumption for SEM is Rs. 1.5 crores since April 2007.  Due to inflation over the last 6 years, this exemption limit should be increased to Rs.3 crores.                                                                                              


v)  Presently Rebate claim exceeding Rs. 5.00 lakhs has to be sent for Pre-audit, which causes substantial delay in sanction of the Claim.  We suggest the exemption limit may be raised to Rs.10.00 lacs.



a) Corporate Income Tax to be reduced to max. 30% and there should be no other surcharge and cess.  Income Tax for individuals and others to be reduced to 25% max. It is an established fact that reduction in tax invariably increases revenue collection.


b)  Presently, audit is compulsory if the turnover exceeds Rs.1.00 crore.  This should be increased to at least Rs.5.00 crores commensurate with depreciation of rupee value.  Further, Income Tax for SME sector from the present level of 30% having annual income of less than Rs.5.00 lacs should be reduced as under.


Income (Rs.)                           Rate of Tax  



Upto 1.0 lac                                     0%

1 to 2.5 lacs                                      10%

2.5 to 5 lacs                                      20%

over 5 lacs                                        30%


Further, TDS on interest should be increased to Rs.20,000/- from the present Rs.10,000/- for Bank deposits and others to Rs.10,000/- from Rs.5,000/-


                   c) The limit of cash payment should be raised from Rs.20,000 to

                       Rs.50,000 under section 40 A (3) of IT Act.



      The exemption limit for Wealth Tax is Rs.30.00 lacs for the last many years.  With depreciation in value of the rupee, the limit should be increased to Rs.75 lacs and the tax rate should be reduced from 1% to 0.5%,



The business commission is a payment made for the service rendered for promotion, canvassing and procuring orders for the companies products and the service is rendered before the goods leave factory premises. Hence, the service tax paid on business commission must be allowed as cenvat credit to be utilized for payment of excise duty. The denial of cenvat credit due to wrong interpretation by some of the ranges of the Excise Dept. has led to a number of litigation. The matter must be clarified and clear instructions be given to the Excise Dept. to allow cenvat credit of the service tax on business commission.



    As per section of 73 of the Companies Act 2013 accepting unsecured loan (deposits) from the relatives of the Directors, who are share holders, of a Private Limited Company is prohibited which was allowed earlier under the old Companies Act 1956. All such existing deposits have to be returned by 31st March, 2015. This measure will cast a severe blow to such companies financial position since arranging for such funds to be returned will be an impossible task for them. Most of such companies are small family managed companies mainly from the SME sector and for obtaining unsecured loans from family members is one of the most important sources of their finance. The above new provision will prove detrimental to the survival and growth of this vital sector. The huge contribution made by the SME sector in India s economy, exports and employment is a well known fact and cannot be undermined. The availability of funds from such readily available source is very essential for the survival and steady growth of this very important segment of India s economy.  Hence, Private Limited Companies must be continued to be permitted to accept deposits from the relatives of the directors by amending the new section 73 of the Companies Act 2013 suitably and by restoring the old provision.



      Bank Deposits are now insured by the Deposit Insurance and Credit Guarantee Corporation to the extent of Rs.1.00 lac.  With depreciation of value of rupee over the years, this limit should be enhanced to Rs.5.00 lacs to protect small investors and to Rs.10.00 lacs for senior citizens.


Sir, we sincerely request you to consider our above proposals favourably.


Thanking you,

Yours faithfully,

For The Dyestuffs Manufacturers Association of India






CC to : 1) Shri Surjit Kumar Chaudhary


                 Ministry of Chemicals & Fertilizers 

                 Dept. of Chemicals & Petrochemicals,

                 Shastri Bhavan,

                 New Delhi-110 001.

            2)  The Secretary,

                 Dept. of Revenue,

                 Ministry of Finance,

                 North Block,

                 New Delhi-110 001.

                              3) The Member Secretary (Budget)

                 Central Board of Direct Taxes

                 Ministry of Finance (Dept. of Revenue)

                 North Block,

                 New Delhi-110 001.

            4) The Member Secretary (Budget)

                Central Board of Excise & Customs

                 Ministry of Finance (Dept. of Revenue)

                 North Block,

                 New Delhi-110 001.

    5) The Jt. Secretary,

         Tax Research Unit,

         Dept of Revenue,

         Ministry of Finance

        North Block,

        New Delhi-110 001.


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