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Run up to the Budget: Paper sector
Inputs
Wood, waste paper, wood pulp, jute, straw, bagasse,
caustic soda, chlorine, power
Tax Structure
Customs Duty (%)
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Item
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1999-2000
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2000-2001
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Paper and Paper Board
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35
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35
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News Print
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5
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5
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Waste Paper
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5
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5
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Wood pulp
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5
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5
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*Basic
Excise Duty (%)
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Item
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1999-2000
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2000-2001
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Paper and its articles (using conventional raw materials)
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16
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16
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Paper and its articles (using non conventional raw materials)
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8
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16
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Wood pulp and waste paper
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16
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16
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Background
- Paper manufacturing is an energy, capital and
water intensive process. Raw Material cost accounts for 40-60% of the total
cost of paper production.
- Given the low per capita paper consumption in
India the long-term demand prospects for paper is favourable.
- Domestic players are increasingly threatened
by cheaper imports.
Previous Budget (FY 2000-01) announcements
- Excise duty on paper and paperboards using non-conventional
raw materials was increased from 8 % to 16%.
Wish List from industry
- Confederation of Indian Industries (CII) has
proposed that customs duty on pigments and binders used in the manufacture
of paper should be reduced from 35% and 25 % respectively to 15 %.
- The Indian Agro and Recycled Paper Mills Association
has urged the Government to reduce the excise duty on paper manufactured from
agri-residue and waste paper based mills to 8% from the existing16%
- The paper industry has asked the Government
to increase the import duty on paper from 35% to 40%
Expectations from the budget
- No major changes expected
Key Players
Ballarpur Industries, Andhra Pradesh Paper, Tamil
Nadu Paper, ITC Bhadrachalam, JK Corp, Orient Paper, West Coast Paper
Rediff-Dun & Bradstreet Budget Impact Analysis
Budget 2001
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